The Effect of the Death of a Spouse on Your Financials
Financial experts advise that you take your time and make calculated personal financial decisions after the death of a spouse. Rushed decisions made in grief may have lasting financial implications.
The first step is to obtain multiple copies of your spouse’s death certificate. A copy needs to be sent to the Social Security Administration (SSA). You can also send copies to your creditors, although they will ultimately get the notification from the SSA. Having extra copies on hand will make it easier to send them out when needed.
You will also need to execute the will. To do this, go to the court to get an order allowing the executor to carry out the deceased’s wishes. Executing a will means to carry out the actions required to liquidate the estate.
If you are unsure whether or not a debt is your responsibility after your spouse’s death, consult with an attorney. Do not agree to pay bills that are not your responsibility. However, be aware that creditors will most likely attempt to seek repayment for your spouse’s individual debts from the estate, if there is one.
When you are ready, there are a few things you can do to move forward financially.
Re-evaluate investment strategies
You will most likely have to change your investment strategies to support your new circumstances. It is important to re-establish a safety net by continuing or starting to contribute to a retirement plan and a savings account. Consider setting aside an emergency fund of at least three months’ salary.
Determine necessary financial tasks
Although you may take time to recover, don’t neglect paying your bills. This could result in your incurring of late fees and a negative credit rating. Establish a procedure to pay bills, make deposits and withdrawals, get cash and pay taxes. Get help from family and friends if you need it.
Create a new spending plan
Note differences in income and expenditures and adjust your spending accordingly. Explain to your children any necessary adjustments so they will understand when cutbacks are made.
Most likely, your experience changed your financial priorities. Decide what you would like to do with your money and put a plan in place to make your goals a reality.
Most importantly, enlist the help and support from your family, friends and community. You might also seek help from your local hospice organization. While you will need to work on your financials, don’t rush into anything that isn’t time sensitive until you are ready.