Losing a spouse is a tragedy that bears great pain. For many widows, the husband handled the finances and now they find themselves not only grieving his loss but also stressing out about how to get organized and what to do next.
Your goal during your first year as a widow should be to just get your bearings, grieve, and stabilize the situation. With that in mind here is a checklist of 10 things that you need to focus on right away which will help you put your life back together and get financially organized.
#1: DO NOT MAKE ANY MAJOR FINANCIAL DECISIONS RIGHT AWAY
You SHOULD NOT be looking to make any major financial decisions at this point. You are grieving and you simply just need some time to pass before you are able to make rational decisions.
So at this stage, don’t make any plans to sell your home, move, make a big purchase, change investments, etc. As stated earlier, this is the time to stabilize the situation and try to get back on track.
#2: CONTACT FUNERAL HOME
This may seem obvious, but we don’t want to leave anything to chance. The funeral home should be one of your first phone calls. There are many helpful services that a funeral home will provide including obtaining death certificates and helping answer any questions regarding Social Security benefits, veterans benefits, and life insurance.
Regarding veterans benefits, if your husband was in the military, the funeral home should guide you to contact the Department of Veteran’s Affairs (1-800-827-1000) to see if you are entitled to a burial allowance, a military funeral, a U.S. flag, and a headstone.
#3: GATHER KEY DOCUMENTS
Part of getting organized will require you to contact various institutions (more on this in a moment). To prepare for those conversations, you will need to gather the following: husband’s birth certificate, husband’s death certificate (need both certified copies and originals; as mentioned above the funeral home should help you with this), marriage certificate, Will, Trust, Financial Power of Attorney, and life insurance policies.
#4: CONTACT LIFE INSURANCE COMPANIES
If you were able to find any life insurance polices, then make your phone calls to those life insurance companies to start the process of receiving the death benefit that you are entitled to.
Next, contact your husband’s employer (if he was working) to see if any life insurance existed as part of his benefits package.
If your husband was a WWII veteran, then contact the VA office at 1-800-669-8477 to inquire about whether your husband had life insurance under the National Service Life Insurance program.
Also, if your husbands was in the military at any point, contact the VA office at 1-800-419-1473 to see if your husband had life insurance under the Veteran’s Group Life Insurance program.
#5: CONTACT SOCIAL SECURITY DEPARTMENT (1-800-772-1213).
You will want to contact the Social Security Department to find out what benefits you are eligible for.
A very strange Social Security benefit that a widow is usually entitled to is a $255 lump sum payout. So while you won’t be able to retire on this amount, be sure to ask to see if you are entitled to it.
But more importantly, you’ll need to find out if you are entitled to any survivor benefits. If you are taking care of children under the age of 16 or if you have children under the age of 18 you will likely be entitled to a survivor benefit. Also, if you are at least age 60, you will also likely be entitled to a survivor benefit.
This is an extremely important decision and one that you should not take lightly. We’ve seen situations where people thought the right decision was to take the Social Security benefit right away, but doing so would have hurt them financially over the long run. In many cases it’s best to wait to receive a Social Security survivor benefit rather that receiving it right away at age 60 because it would be reduced. Plus there are different strategies that you can employ that are intended to maximize your benefit. One in particular is taking your own benefit when eligible and then later switching to your survivor benefit. Or vice versa, taking your survivor benefit first and then switching to your own benefit later. Every person’s situation is truly unique and you must calculate the numbers to find the optimal solution.
The ultimate goal is to maximize your Social Security income so that you don’t have to take as much from your investments to supplement your income. Do yourself a favor here and talk with an experienced Social Security expert or a CERTIFIED FINANCIAL PLANNER™ who knows the Social Security rules inside and out.
#6: CONTACT AN ESTATE PLANNING ATTORNEY
Hopefully you were able to track down any Wills, Trusts, and/or Powers of Attorney. Once you’ve located the documents, bring them to a local estate planning attorney who can help you figure out what legally needs to be done next.
If you can’t locate your documents or you simply don’t have any, then you should still plan to meet with an attorney as there are things that you legally must do.
A qualified attorney can help you determine if any assets have to go through probate (the legal, court supervised process of getting assets and property to the proper beneficiaries). Also they will help you determine how to properly re-title accounts and list beneficiaries (see #7 below).
#7: UPDATE ACCOUNT TITLES AND BENEFICIARIES
It is likely that many of your accounts and assets (i.e. house, vehicles, investments, credit cards, etc.) still have your husband’s name on them. As such, you will need to contact each institution to have his name removed. For your vehicles, you will need to go to your local Department of Motor Vehicles. For your house, it will be best if you work with an estate planning attorney who can help you change the title on the deed.
#8: CONTACT YOUR ACCOUNTANT
Obviously you’ll need to contact your accountant to file your income taxes by the April deadline; however, you’ll want to contact your accountant right away to determine if you need to file an estate tax return, a gift tax return, and/or a generation skipping transfer tax return.
The rules here are fairly complex, but suffice it to say that you don’t want to miss any deadlines or lose out on any amounts that could be exempt from taxes.
#9: CONTACT HEALTH INSURANCE COMPANY
If your husband was working, and you were on his health insurance program, then you may be entitled to maintain that coverage under a federal provision known as COBRA. Contact his employer’s benefits office to find out the cost of COBRA coverage. Once you know that price, it will be worthwhile for you to get a quote from a health insurance broker to compare the costs and coverage.
If you and your family were on your health insurance plan, then be sure to contact the company to have your husband removed.
If your husband was in the military, then be sure to contact Tri-Care at 1-877-874-2273 to find out if your eligible for this health insurance coverage.
#10: DETERMINE INCOME, ASSETS, EXPENSES, AND DEBTS
If your husband handled the finances then this particular step is going to be somewhat challenging and require some digging.
Let’s start with Income. It is possible that you are now faced with less income than before. While Social Security and life insurance proceeds may be there to help bridge the gap, it may or may not be enough to meet your needs. But for now, ensure that you understand what your income is and that you have enough in place to get you through the next few months. Remember that you don’t want to make major decisions at this point. Just stabilize the situation until you are emotionally ready to do more planning.
Now let’s discuss Assets. For now you’re just looking to identify your assets. That’s it. Don’t worry about selling anything or making any decisions with your assets. Just identify them for now. Assets would include things such as your house, vehicles, investments, bank accounts, etc.
Let’s move on to Expenses and Debt. It can be overwhelming to even know what types of bills exist, so use this spreadsheet as a way to identify expenses and jot them down as you discover what they are. Be sure to check your husband’s email for any bill notifications, watch the mail for bills that come in, look for a list of user names and passwords that your husband may have kept lying around the house (this will help you to not only identify bills, but also to know how to log in and pay them), look at your bank account and credit card statements to help discover recurring bills that your husband paid, and lastly review your most recent tax return to see if anything stands out on there. On the debt side of things, try to identify what loans you have. This could be a mortgage, vehicle loans, student loans, credit card balances, etc. Again, your tax return may be helpful in determining if there are any loans that you weren’t aware of.
While this is a time of great pain for you, hopefully this checklist has been helpful in reducing some of your stress and gives you a good idea of what you need to focus on.
If you don’t want to tackle or plan for all of this on your own, then a good place to start is meeting with a financial planner. They can be the quarterback of the situation and give you your marching orders one step at a time. That way you won’t be more overwhelmed than you already are.
I’m so sorry if you are reading this and you are a new widow. But stand strong knowing that you have friends, family, and professionals willing and able to help you through this tough time.
If you are a new widow, what are some of the things you are struggling with? If you’ve lost a love one in the past, what sort of advice would you give to a new widow? What helped you get through the tough times?
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If we can be of service to you during this tough time, then feel free to reach out to us.