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Financial Planning for Women – Part 4 (Helping Widows)

In my previous blog post, Financial Planning for Women – Part 3 (Long-Term Care), I talked about why Long-Term Care is so important for a woman’s longevity. In this post, we will discuss how we help widows through one of the toughest times of their lives.

We recognize that the death of a spouse is a traumatic and overwhelming experience that affects each person in their own unique way. It’s often difficult to concentrate and to make rational decisions when their world has just been turned upside down. As specialists in helping widows, Inspired Financial walks with each client as they go through this difficult time. We help them prioritize their financial life so they know what needs their prompt attention and what can wait. If her spouse was the one that took care of most of the finances, the financial aspect of her life can feel very overwhelming and stressful. We can serve as her “thinking partner” as she progresses through the things that she needs to take care of and relieve her of the stress for the rest.

Below are some examples of what needs prompt attention and which things can wait:

Steps to take upon the death of a spouse:

  • Make a list of contacts you can reach in an emergency.
  • Contact your team of professional advisors (financial planner, attorney, tax preparer).
  • Order at least 15 copies of the death certificate from the funeral director or health department.
  • Be certain you have sufficient cash flow during this transition period. We can help you prepare a statement listing where money will come from and where it needs to go in the coming months. Include a list of regular bills.
  • Organize your information: Start a filing system for quick and easy reference that’s easy to take to meetings. For example, use an accordion folder with multiple partitions.
  • Gather important documents to have available for reference as you settle the estate and collect your benefits.
  • Collect the Social Security death benefit and check for eligibility of survivor benefits.
  • Make claims on life insurance and check other sources: employer, former employers, and professional associations or unions.
  • Roll over your spouse’s Individual Retirement Accounts (IRAs) into your own. We will guide you on the process for making this change.

Steps that can be done later:

  • Cancel credit cards that are just in your spouse’s name. For any jointly-owned credit cards, you may want to hold off temporarily on changing names on those cards so you can continue to use them without interruption (the company may need to send you a new card once you make the change).
  • (6 months later): Request a copy of your spouse’s credit report from the three credit reporting agencies (TransUnion, Experian, and Equifax) and notify them of your spouse’s death.
  • (6 months later): File an estate tax return with your tax preparer or attorney. This may be necessary even if no federal or state estate tax is owed. We will collaborate with your tax preparer to collect the information necessary to file this return (which is due nine months after the date of death).
  • (12 months later): If you own a jointly-titled checking account, don’t change the names on the account for a year or so because checks may still come payable to your spouse for some time. You’ll be able to deposit these into your joint account.

If possible, postpone major decisions during the first year. She is going through a grieving process and her life may feel like it’s spinning in circles. Her mental, emotional, and physical condition may be very different than before her spouse’s death.

Well-meaning acquaintances, extended family, or salespeople who don’t really know her entire situation may bombard her with suggestions. It can be useful to have a friend or trusted advisor help her think through some decisions she will face. For example, now may not be the time to pay off her home mortgage, sell the house, or move in with a family member.

She is at a very vulnerable time following her spouse’s death. It’s important to go slowly and give her time to heal. We recommend that she ask herself this question: “Must this decision be made right now or can it wait for a future date, which might be a better time for me to make the right choice or take-action?” She can take her time and know that Inspired Financial is here to help her every step of the way!

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