Losing a spouse is never easy. In addition to processing the profound emotional impact, you and your family must address various financial issues. The challenge can be exacerbated when your spouse was the primary income earner or dealt with your finances independently.

The greatest challenge is not to determine the "perfect" next steps to take. Rather, you must figure out how to grieve, process, plan, and grow—all in the context of this life-altering event. 

Newly Widowed… Now What? Your First Financial Steps

After such an event, you will be engaging with a flux of emotions—and a flux of financial questions. It's a complicated reality: In addition to funeral planning, you will need to think about financial planning for a new normal. The "now what" of being newly widowed can be divided into three primary phases: Notification, Organization, and Continuation.

Notification

First, you need to focus on notifying all the necessary people about the death of your spouse. This includes both individuals and organizations:

• Family and friends: Notifying your friends and family members who may not have found out immediately is essential for establishing your emotional support network. You may also want to notify the friends of your late spouse. Notifying your network can set you up for an easier transition by providing you with a group of people you can rely on for help should you need it.
• Attorney and CPA: You will likely have legal and tax matters to address. And if you are serving as executor, the responsibility may seem daunting. Working with a CPA or attorney can reduce stress and ensure you take all the important steps. Now is not the time to go it alone.
• Government and insurers: You should let the Social Security Administration (SSA) know as soon as possible after the death of your spouse. Your funeral home may handle this for you. Still, it's important to make sure the SSA is notified so you can collect any survivor's benefits you may be entitled to and maximize your Social Security benefits. You should also contact your spouse's life insurance company and any other organizations that may provide you with benefits, such as the Department of Veterans Affairs if they were a military Veteran.
• Employer/Pension Company: If your spouse was still working, notify the employer. You may be entitled to benefits such as group life or accidental insurance. If your spouse was already receiving a pension, you might be entitled to continuation of payments depending on the plan option your spouse selected. 

Notification Tip: Get more death certificates than you think you need. After the funeral home tells you the record is ready, you can work with your state government to obtain death certificates. Some stubborn organizations, including utilities and even cable companies, may not close out certain accounts without a valid death certificate. Getting more than you think you need at the outset will ensure you have enough if companies you're dealing with unexpectedly require a death certificate.

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Organization

After adequately notifying your network, the organization phase begins in earnest. In this phase, you will gather all of your relevant financial documents.

The organization phase can be split into three main components:

• First, find the big three: wills, life insurance policies, and assets. You may have already contacted your spouse's life insurance company, but it's important to assemble and review these documents to ensure you get everything. The same goes for a will, which can guide the rest of your organizational process. Finally, note the location of assets and investments in trusts or other accounts as you orient yourself.
• Next, organize ALL your documents and statements chronologically. From tax returns to bank statements, you need to be sure you have a complete view of your new financial situation. It's only possible to achieve a high level of confidence about your outlook if you gather all the documents that relate to your assets and liabilities. Remember that your spouse may have some documents or statements delivered via email. Check this periodically throughout your organization process to get all the information.
• Finally, put the puzzle together. Through this process, you should be able to assemble the pieces of your financial life, understanding what you have, what you may owe, and what you still need to resolve. For outstanding matters, you may need to engage in probate, the court-supervised process of finalizing your spouse's estate.

Organization Tip: Close accounts and cancel subscriptions in your spouse’s name. This can help prevent fraud and save you money. Start by canceling government IDs like your spouse’s driver’s license and passport. Then, close credit cards and remove your spouse's name from any joint accounts. Finally, review credit card and bank statements to cancel any recurring charges that relate only to your spouse, like a magazine subscription or gym membership. As you figure out what needs to be paid going forward, consider taking a little extra time to set up automatic bill payments, a feature many organizations offer. This can assume the stress of remembering bill payments as you continue the rebuilding process.

Continuation

Finally, it will be time to plan for your immediate and long-term future. This, too, can be broken into three steps:

• Setting New Goals: Your financial goals and priorities may significantly change following the loss of your spouse. After the dust settles, it's critical to reassess and adjust these goals accordingly. For instance, your spouse's life insurance policy may provide you with either a lump sum or a series of payouts that you can integrate into your plan. Alternatively, suppose your spouse was the primary earner of your household, and you planned to rely on their income. In that case, you may need to reconsider your retirement goals and other financial objectives.
• Estate Planning: You should work with a professional to revise your estate plan as soon as possible. Your spouse was likely an integral part of your estate planning process, so you may need to update the various aspects of your plan, including these five essential documents for a good estate plan: will, beneficiary designations, power of attorney, health care directive, and any revocable trusts you may have.
• Reviewing Your Insurance Coverage: You should also evaluate your current insurance coverage, including health insurance, long-term care insurance, and life insurance policies. Suppose any of your previous insurance purchasing decisions relied on the assumption of your spouse being around. In that case, you might need to revisit the decision and potentially purchase additional insurance to protect your new financial future.

Continuation Tip: Working with a financial advisor can be beneficial in navigating the murky waters following the death of a significant other and developing a new comprehensive financial plan. You can rely on your advisor's expert guidance as you reorient your life and set new goals. A comfortable and familiar relationship with a good advisor can give you someone to trust during this difficult time.

Offering Advice and Guidance for New Widows/Widowers

At Wealth Enhancement Group, we know it can be incredibly difficult to move forward after losing a spouse. In addition to the emotional ramifications, tying up any outstanding financial matters while planning for a new future can seem daunting. This is why having a knowledgeable and reliable advising team behind you is so important during this stage.

If you've recently been widowed and want guidance on how to take these steps for yourself, you can set up a free, no-obligation meeting with one of our financial advisors to help you navigate the process.

If you're reading this not because you've been widowed but because you're planning for the worst and hoping for the best, now is the best time to establish your plan. Many common financial challenges a surviving spouse typically faces can be reduced or avoided with the proper planning techniques.