Last Updated: June 29, 2009
In a word, being a widow can be overwhelming. Indeed, you have to deal with a host of things related to money, including estate administration, investments, and more.
"A newly widowed woman — or man — has to deal with many complex estate and financial matters," FPA member, Lyn Dippel, CFP®, a vice president at Financial Advantage stated in a recent release. "It can be overwhelming, particularly if the spouse was the primary financial manager and decision maker."
Here's her checklist of what widows need to do:
Administer estate and get immediate access to money. "Settling the estate can be anywhere from a six- to eighteen-month process. Widows usually need help to understand the legal process and terminology, the complex paperwork involved, and the steps needed to get accounts and assets re-titled and set up so they're easy to manage. Accessing funds during this process can be tricky, depending on how well the original estate plan was drafted," Dippel noted.
Revise cash-flow projections. "The widow may no longer receive pension payment, but sometimes will receive a survivor pension or death benefits. Social Security payments may decline," said Dippel. "Her new tax status as a single person may affect her cash flow. Expenses often change. Sometimes the widow will move to a smaller home. All these items must be calculated."
Revisit investments. "The widow may have received insurance money that needs to be invested. She may have new beneficiaries and different cash-flow needs that may suggest a more conservative or more aggressive investment approach," Dippel said.
Revise estate plan — a little or a lot. "Depending on how the original plan was created, a widow may or may not need a substantial revision. Usually, at least beneficiary designations need to be changed and new contingent beneficiaries named," Dippell said. "New powers of attorney usually are necessary since there is no longer a spouse. A widow should typically designate someone else to act on her behalf in case she has an emergency and can't manage her own affairs, either temporarily or permanently."
Get smart about money. "Often, a recent widow will also need general financial education if her husband had handled the family's money," Dippel wrote.
You may want to consult with a financial planner to help manage your finances during this difficult time. Find a financial planner.