If Widowhood Happened Tomorrow, Would You Be Prepared?
Losing a spouse and life partner is one of the most difficult experiences a person can go through. While we may want to avoid thinking about this possibility, the truth is that death is a part of life. Since the life expectancies for men and women vary greatly,[1] it’s important to prepare for the possibility of widowhood.
You may not be able to emotionally prepare for the loss of a spouse, but you can prepare financially, and this can help relieve some stress and worry associated with all the legal and financial concerns accompanying this. Here are some questions to ask yourself to prepare for the possibility of widowhood.
In the aftermath of your spouse’s passing, their will is not the only document you will need. Your marriage certificate, their birth certificate, and their Social Security card will be required to do things like request benefits or change the name on your car titles. Make sure you know where all this paperwork is located, in addition to automobile titles and property deeds.
If your spouse doesn’t have a trust, they may need to draw one up immediately. A trust ensures that your spouse’s assets are protected and are disbursed to heirs as designed. Unlike a will, trusts allow the owner to determine how their estate is disbursed rather than just listing their wishes. In addition, trusts do not need to go through the long and complicated process of probate that wills do. Without a trust, it takes a lot longer to get closure and all the details can get messy in the process. If your spouse does have a trust, make sure it is up to date and they have worked with a professional to get all the legalities in place.
When your spouse dies, you may be entitled to Social Security benefits and other assets like pension benefits, life insurance and annuities. If they are still working, there’s a good chance you will be eligible for benefits through their employer of which you are unaware. Have your loved one make a list of all the benefits you will receive at their death and ensure you have the necessary information to claim them.
You probably have a checking account, savings account, retirement and other investment accounts. When your spouse dies, the management of them will fall to you. Therefore, you need a list of every account you have, whether joint or in only one of your names, the type of account, the institution that holds it and the account number. It is also important to ensure that beneficiaries on all investment and bank accounts are correctly listed.
In addition to your assets, you have liabilities such as debts, insurance and monthly utilities. Since you don’t want to default on your mortgage while you’re trying to cope with your loved one’s death, record the relevant information for these accounts as well including how and when payments are made.
An important part of developing a plan to move forward alone will involve knowing your current spending and income needs. If you don’t already have a written cash flow statement, begin tracking your income and expenses to create one. These considerations will be an incredible aid when planning for the future.
Does Your Spouse Have Adequate Life Insurance Coverage?
If your spouse is the sole breadwinner and has not retired, having enough term life insurance to pay off any debts and cover living expenses until you are eligible to access money from your retirement accounts or Social Security is imperative. Not having enough coverage could require finding employment to maintain the lifestyle you are accustomed to. Ultimately, having adequate coverage helps to minimize the amount of changes (spending, employment, housing) you need to go through.
Having a strong support system will carry you through the death of your spouse and give you the strength to move forward. Part of that support system should be a trusted financial professional. In many marriages, the one spouse handles the finances and it is they who has a relationship with the family’s financial advisor. If they pass away first, the other spouse inherits an advisor they neither know nor trusts.
It is vital to have someone you trust that you can turn to for help in financial matters. Widowhood is an extremely vulnerable time, and many unscrupulous people prey on widows. Take some time now to get to know your financial advisor and make sure you like working with them. Your well-being is of the utmost importance, so if necessary, find another advisor.
Preparing for widowhood can be a sobering process. While the prospect of this possible reality is not something you want to think about, you won’t regret being prepared should you find yourself in these circumstances. At Coign Capital Advisors, our mission is to deliver customized solutions that enhance our method and help make your financial goals more achievable. If you are looking to build a solid financial foundation, we are here to answer your questions. Send us an email at info@coigncapital.com or call 801-676-4570.
Coign Capital Advisors is a fee-based investment advisory firm based in Draper, Utah. Specializing in serving retirees, business owners, and entrepreneurs, the firm provides holistic wealth management that goes far beyond investment consulting and strives to attain suitable performance combined with solutions that make clients’ financial goals achievable. Led by J. Matthew Zundel, Robert P. Welch, Adam G. Lefler, M. Brandon Riley, CFP®, Daniel R. Zundel, and Courtland Adams, clients receive a high level of service from a team with more than 90 years of combined experience. To learn more, visit www.coigncapital.com.
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