BY: NICOLE JACOBSEN-NALLY, CTFA
Louisville, KY Market President | (502) 569-7400
Losing a spouse is a life-changing, traumatic event. While your sorrow will subside over time, most widows face a new challenge: managing an uncertain financial future. A study by the U.S. Government Accounting Office showed that a widow’s household income fell by 37 percent, while a widower’s declined only 22 percent.
During my career as a fiduciary trust and investment advisor I’ve worked closely with many families and widows. When I lost my husband in 2018, my experience and training helped, but didn’t seem to make my journey any easier. It did, however, demonstrate just how unique is every widow’s grieving process and also just how similar.
It made me realize that I needed to take the time to mourn – and that I needed to wait at least a year before I made any big changes, especially financial changes. I also learned to embrace the four tasks of mourning that J. William Worden describes in his book “Grief Counseling and Grief Therapy.” I’ve modified these a little, but I agree with Worden that widows should complete each task so the process of mourning is completed. Worden advises widows to:
- Accept the reality of the loss
- Experience the pain of the loss
- Adjust to the changes in the new reality
- REINVEST in the new reality
Every widow’s experience is different and so is the length of time each will take to substantially complete this process. Here are five lessons I learned during my journey that I hope will help you make better financial decisions after losing your spouse:
1. Find an advisor or someone you trust
If you are not already working with a financial advisor, then find someone you trust to help navigate the many challenging tasks you face. Even simple tasks, such as closing a bank account, can be overwhelming. The inability to make decisions is a true “grief response” for many widows. Having a trusted person near you or on-call to support you will help alleviate some of the stress from losing your spouse.
Once you have identified your trusted advisor, now is the time to lean on that person for advice, guidance and, most importantly, support. Don’t give in to your feelings that you are alone. If you are working with an attorney for probate or estate administration, have that person file any claims on your behalf. Both professionals will protect you from being taken advantage of during this difficult time in your life.
2. Hold off on making financial decisions
DO NOT make any unnecessary financial decisions during the first year. Period. This includes changing investments and/or purchasing any new financial instruments (for example, stocks, bonds or real estate). I can’t stress this enough. It is easy to think that you must find your “new normal” quickly to start to heal, but it will be many months before you are equipped to figure that out.
3. Understand the value of your financial assets and liabilities
Financial goals for widows vary by circumstance and situation. The primary initial goal should be to become familiar with your assets and debts and to get into a routine of paying household expenses (if you didn’t already manage paying the bills). Once you’ve been doing that for a year you will have a clear understanding of your total financial picture (income, expenses, assets and debts) and will be in a much better position to determine and adjust to your new financial goals.
4. Get help with life insurance claims
Typically, the funeral home can file a claim on your behalf for life insurance proceeds or assist with completion of claim forms. Let them do it if they provide this service. Any funds received during the first year should be maintained as cash (and invested in a money market fund) until sufficient time has passed. Again, I recommend waiting at least a year – the time may vary depending on your situation – before you make changes to how the funds are managed or invested.
If it falls on you to file your life insurance claim, contact the insurance company yourself, by phone or online, to request and complete the claim forms and avoid the local insurance agent. You should shield yourself from well-meaning agents trying to sell you investment products that are not in your best interest.
5. Hold off changes to your Social Security benefits
If your spouse was entitled to monthly Social Security checks, you must report the death and stop those payments. Although you have up to one year to file a claim for survivor benefits, if you know you need to file a new claim, call and make an appointment that is at least a month out to sit down with a Social Security officer.
Use that time to manage household bills. Keep your expenses to a minimum to “keep the lights on,” so to speak. It typically takes several weeks to receive a certified death certificate to file a Social Security survivor claim anyway, so take that time to catch your breath. You may want to take your trusted advisor with you to the appointment.
Grief is a journey and it’s tough work. Be gentle with yourself and remember that what you are going through is normal. Find support from your family, but also consider using local grief counseling services to help you understand the roller coaster of stress and emotions you are experiencing.