By FPA Member John A. Frisch, CPA/PFS, CFP®
Last updated April 12, 2010
Every year in the U.S., over a million women lose their husbands and find themselves widowed. According to the U.S. Census Bureau there were 11.4 million widows in the United States at the end of 2009.1
Each widow's circumstances is very different from the next, but almost all widows experience a dimension of grief invading their lives, clouding the decision-making capabilities of even the sharpest among us. That's why one of the greatest gifts a husband can share with his wife is to pre-plan with her. While they are together, couples should pre-arrange a financial plan that will survive the husband's death. The plan will be on auto-pilot, relieving the widow of a significant amount of additional stress during her grieving period. Also a financial support team can be put in place to see to the details that need to be addressed post-death.
Grief and Early Bereavement
Widows attempting to make vital financial decisions are highly likely to find the process exponentially more challenging than it is during happier times. Grief adds an extra layer of complexity to an already challenging process. Emotions can run the gamut, from fear, loneliness and confusion to guilt, even anger. Little wonder that grief can interfere with sound decision-making!
We've identified three phases during the journey from widowhood to "selfhood" (Widow to Widow author Genevieve Davis Ginsburg's eloquent term for the process): a period of initial shock and fog; a period of reclamation; and a third, optional period of regeneration.2
Here, we focus on the first period of shock and fog. Shock is different than grief, which is defined by therapists as a specific type of cognitive dysfunction. In English, that means we can't think straight when we're grieving. Shock is not a dysfunction. In fact, it may be nature's way of helping us continue to function at a basic level, even if we don't remember anything we say or do. A widow may go about her daily activities and appear to be calm and collected, but she is often in a deep — some might say a protective — fog, with little or no lasting memory of the events.
In light of early bereavement shock, the period immediately following the loss of a spouse is usually the worst time for making financial, legal and other planning-level kinds of decisions that could impact her and her family for years to come.
And yet, decisions large and small, familiar and foreign, crowd a widow's life. Certain events and decisions must take place at this time. Clearly, funeral arrangements cannot wait. A death certificate must be obtained; family, friends, business and social associates must be contacted and various levels of government notified. Credit cards should be cancelled, joint assets re-titled, insurance policies examined, outstanding bill payments arranged, and so on.
Pre-Planning: A Pound of Prevention
Pre-planning prior to widowhood plays a critical role in mitigating many of the above challenges. In fact, the plans most effective during the shock of early widowhood and the subsequent grieving period are those crafted by the husband and wife together, well in advance:
- Pre-planning can significantly reduce stress and anxiety during crisis periods.
- It ensures that decisions are made within a relaxed timeframe, when the family can contemplate their plans in a rational mindset instead of in panicked reaction.
- The husband and wife are still a team. They can listen to and support each other in the decisions made, and share preferences under various "what if?" scenarios.
- Pre-planning can render stronger legal documents that clearly define the family's wishes.
Planning involves various types of expertise, preferably orchestrated in a coordinated manner to avoid redundant, missing or conflicting directives. A wealth advisor or seasoned financial planner can coordinate moving parts, including funeral arrangements, investment, tax and risk management, estate planning and family business operations. He or she can coordinate the efforts of a team of specialists such as funeral directors, Certified Public Accountants (CPAs), attorneys, insurance specialists and company executives.
Thus, one of the greatest gifts one spouse can leave the other is the gift of freedom from fear of financial concerns. Couples should work together in life with their trusted advisors to put a plan in place that survives beyond the point that death do they part.
FPA member John A. Frisch, CPA/PFS, CFP®, PFP, is Founder and President of Alliant Wealth Advisors with 25 years of experience in the industry. Alliant Wealth Advisors focuses on helping families find financial peace of mind.