Women's Money Blog

Recently Widowed – Now What?

Women on average live longer than men, and many marry older men.

The result is that most women will find themselves alone since the median age of widowhood is around 60. This is a bad time in any one’s life to become financially responsible since it is usually when wealth is highest and there is more at stake. This is especially true for many married women who did not participate in financial decision making in the past and did not develop necessary skills to make good financial decisions.

The best advice during this emotional time is to take it slow and don’t rush into any major decisions about your financial future. Irreversible decisions made at times of great emotional stress are often regretted. Except in cases of extreme economic necessity, women going through this emotional time should put off decisions about such matters as selling their house, retirement or giving away assets.


Probably most important is to recognize that you must become financially engaged. This means that you need to educate yourself and ask a lot of questions to become knowledgeable about your financial life. Also there are some key things which you probably need to take care of.

The first of these is funeral arrangements. The best way to find a reputable funeral home quickly is to get referrals from friends. Before you leave the meeting with the funeral director, be sure to have in hand an itemized list of everything that you’ve committed to with a total price at the bottom. Amid the confusion that typically overcomes individuals facing this emotional time, it’s easy to misunderstand what things can cost. And costs that you may agree to orally sometimes have a way of growing, much to your chagrin when you get the bill weeks later.

As soon as possible after the funeral, the following things may need attention right away:

  • Obtain multiple copies of the death certificate from the funeral home (many provide them) or from the clerk of court in your county or city. These aren’t photocopies of the original. They’re official copies carrying the clerk’s seal, and as such, they’re legally valid for submission regarding estate matters and the transfer of assets.
  • Understand current expenses and existing cash. If you haven’t been involved in paying the bills, go through the check register or the account online (after getting the password by visiting the bank with an official copy of the death certificate).
  • Get a handle on assets, including liquid assets—such as stocks and money market accounts—that you may need to draw from to pay living expenses. If you do need to take money out of these accounts, be mindful of possible tax and estate (discussed later) consequences.

Also, you should immediately identify and pursue all available survivor benefits, including:

  • Life insurance policy proceeds. Notify the insurance company to make a claim, submitting an official copy of the death certificate.
  • Employer benefits. Contact the HR department of your late spouse’s employer to determine the status of potential pension and other accumulated retirement benefits, their accessibility and what’s involved in transferring them to you. Be sure to ask the HR department about your health insurance. If you’ve been a subscriber on your husband’s policy, you’ll be eligible for continued coverage for 36 months under COBRA. Also, many companies provide employees with small life insurance policies, so check on this.
  • Social Security benefits. Surviving spouses (who were married at least nine months) are eligible for these benefits beginning at age 60 even if your husband was not at full retirement age and did not start benefits yet. There are various ways to optimize your benefits so take your time with this decision. Consider that benefits received prior to full retirement age will be reduced. Despite the reduction, claiming spousal benefits as early as 60 might be a good idea if you need the money but if you don’t, you might be better off if you let these benefits grow and claim later. Still there may also be the option of taking a widow benefit and later switching to your own benefit, or vice versa. Before deciding when to begin your Social Security benefits you may want to use a Social Security calculator (http://www.aarp.org/work/social-security/social-security-benefits-calculator/?cmp=RDRCT-SOCI_JUNE15_011 ) that can account for widow benefits, or consult with a retirement planner who offers advice on Social Security strategies.
  • Veterans’ benefits. Some survivorship benefits are available to spouses of veterans, including a one-time payment of $255 upon the veteran’s death.

After you have taken care of the immediate concerns you have time to learn more about financial choices which will have long-term impact.

If you haven’t been financially engaged during your marriage you may need expert advice. Your first contact should be the attorney who drafted your will and estate documents or another attorney who can interpret them. Estate settlement requires some legal work and a lot of legwork, particularly if the estate is substantial. It is best to meet with an attorney early if the estate plan involves any trusts since moving assets could result in an override of the terms and may cost you and your family the loss of significant savings.

After meeting with an attorney, you may also need to engage a financial advisor. This could be well worth it since taking advice from friends who lack professional credentials and objectivity could create problems. Be wary of acquaintances and vendors who come out of the woodwork after you’re widowed, possibly offering self-interested advice, products or services. A good credential to look for in an advisor is the Certified Financial Planner (CFP), indicating an extensive course of study, work experience and successful passage of examinations. Helpful resources for finding advisors include the advisor-locator function of the website of the National Association of Personal Financial Advisors (www.findanadvisor.napfa.org) and the site of the Financial Planning Association (www.financialplanning.com).

In your initial meetings with advisors, look for someone with whom you can communicate and who is clear about fees and how they’re assessed. Consulting qualified estate attorneys and financial advisors as soon as possible may be especially critical for widows who have inherited large estates. Even if you’re the sole heir and the only executor, moving assets around or removing cash from accounts before you’re aware of all of the legal, tax and strategic investing implications can cause irreversible problems down the road. So ask questions first and act afterwards.

Beyond just settling the estate, you may want to contact a qualified advisor to manage your inheritance for the long term. If your husband had a financial advisor who you know, like and respect, you may want to stay with that person. But regardless of whether you use the same advisor or find a new one, you should be aware that your optimal financial planning scenario may be a lot different than your husband’s.

Things have changed and he may have had different goals than yours. Also your income and spending needs probably have changed since at minimum you are now taking care of one less person. Accounting for these elements is crucial to determining what kind of investment portfolio you should have and how it should be managed. A skilled financial advisor can help you determine how your goals may be different now and they will assess your risk tolerance under this new situation. As time passes you will begin to see how this new chapter in your life can also bring you happiness and you will know that your money is positioned to help you achieve it.

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Thursday, 01 October 2020

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