If Widowhood Happened Tomorrow, Would You Be Prepared?
No one wants to think about losing their spouse. It may be the last thing on your mind, but it’s important to be prepared for all the legal and financial implications accompanying the event of widowhood.
While it’s impossible to emotionally prepare for the loss of a life partner, taking some time to answer the following questions may help you prepare in case you ever find yourself in this situation.
Do You Know Your Current Financial Situation?
One of the hardest parts of widowhood is moving forward without the support of your spouse. Maybe they were the ones who handled all of the day-to-day financial matters and now you are stepping into this role for the first time in your life. It can be overwhelming to say the least.
The best way to prepare for this possibility is to make sure both spouses know what they have and where assets are located. Both spouses should have access to important financial account information including checking and savings accounts, retirement plans, life insurance, wills, trusts, and other investments. At a minimum, both spouses should have access to the account numbers and any login information. Also keep in mind that in some cases, settling an estate may require a birth certificate and/or marriage certificate (even if you are divorced), so it’s important to keep these in a safe and accessible location.
Additionally, understanding how these accounts are titled (joint or individual), as well as who is listed as the beneficiary, are crucial aspects of estate planning. Having joint ownership or listing each other as beneficiaries can help the assets transfer smoothly.
What Benefits Are Available to You?
Understanding your benefits is another important aspect in preparing for the possibility of widowhood. Things like Social Security, life insurance, pensions, and annuities should be assessed ahead of time so that you’re not struggling to make difficult financial decisions immediately after loss.
In addition, there may be other employer-sponsored benefits available from your spouse’s current or former employer. Work together with your loved one to make a list of all the benefits either of you will receive in the event of widowhood as well as the information needed to access these resources. As difficult as it may be, talking about these benefits ahead of time can help you both feel prepared if widowhood were to happen.
What Does Your Income and Spending Plan Look Like?
Life after widowhood will be challenging, but a detailed plan can help ease the transition by alleviating the stress of making day-to-day financial decisions. Start by creating a current budget, if you don’t have one already. Together, you and your spouse can discuss the types of income and expenses that will either be added, removed, or modified from the budget if widowhood were to happen. It may seem strange in the moment, but it can be an incredible aid when planning for the future.
Special attention should be paid to income, like pensions and Social Security benefits, and debts like mortgage payments, car payments, credit card debt, and other loans. Understanding how you will manage your finances in the event of widowhood is crucial to creating a sound future for the surviving spouse. The last thing either spouse wants to do is leave behind expenses that their loved ones can’t manage. Planning ahead can help alleviate this burden and provide comfort to both spouses knowing that their partner is going to be okay on their own.
Do You Have a Trusted Advisor?
Having a strong support system will carry you through widowhood and it will give you the strength to move forward. Part of that support system should be a trusted financial fiduciary.
Whether you are working with a financial advisor already, or you are looking to hire one, take your time getting to know them and make sure you like working together.
If there is one spouse who tends to handle all financial matters, make it a point to introduce the other spouse to the financial team. Widowhood is a vulnerable time and it’s vital that both spouses feel comfortable reaching out for help with important financial matters. If one or both spouses don’t trust the advisor, it may be necessary to reevaluate the relationship.
Your well-being is of the utmost importance during this process, so don’t be afraid to interview several financial professionals before choosing the one you trust the most. Consider hiring a Certified Financial Planner™, who as fiduciaries are required to put your best interests above all else.
We Can Help
As difficult as this process is, preparing for the unexpected is always better than trying to pick up the pieces after a loss. At Tranquility Path Investment Advisors, LLC we specialize in working with individuals, couples, and families throughout life’s many milestones—good and bad. We’re here to guide you and, as CFP® fiduciaries, always serve in your best interest.
If you’d like to discuss preparing for widowhood (or any other financial need), schedule an introductory meeting online or reach us at (908) 759-6322.
Henry Zupko is the founder and president at Tranquility Path Investment Advisors, LLC, an independent Registered Investment Advisor firm dedicated to putting their clients first, always. With over 30 years of experience, Henry sets the direction of the firm, manages, and in many cases personally interacts with clients to help develop financial strategies that set them on a tranquil retirement path. He is passionate about being a trusted partner to his clients, developing long-lasting relationships so he can guide them through life’s milestones, twists, and turns. In all he does, Henry strives to make a positive impact on others and help change their lives for the better.
Henry is a CERTIFIED FINANCIAL PLANNER™ professional and holds an MBA from the University of Massachusetts and a bachelor’s degree in electrical engineering from the New Jersey Institute of Technology. Henry is a proud Eagle Scout who loves traveling the world and spoiling his grandchildren. To learn more about Henry, connect with him on LinkedIn.