Losing one’s spouse is a possibility no one likes to think about. But it is something many Americans face: There were 12.8 million widows in America in 2015, according to the non-profit widow-advocacy group, The Loomba Foundation. Becoming a widow ranks as one of life’s most traumatic experiences, second only to the loss of a child, and women tend to have a more difficult time than men, says a National Institutes of Health report. One major contributing factor is financial worries, and if you’ve been recently widowed, having to manage your finances on top of everything else can be truly overwhelming.
But there are simple steps you can take to keep your finances in order and avoid costly mistakes, says Brad Ledwith, author of If You Are Suddenly Single. Ledwith’s own childhood experience watching his mother take care of the family when she unexpectedly became a widow partly led him to become a financial planner. Here, he shares the five things you must do.
Keep everything as status quo as possible.
In the midst of grieving and feeling like your world has turned upside down, you may also feel like you have to make changes right away. But wait. “People tend to want to ‘get things done,’” says Ledwith, but “it’s really important to not make quick decisions that the widow regrets later.” Focus instead on just paying the bills and running your household as you usually do for at least the first six months, and even up to a year after your spouse’s passing. That will give you time to adjust to your new life and make better financial choices.
Focus on just the essential tasks for now.
There are a handful of things you do need to tend to right away:
Death certificate and affidavit of domicile: In order to alert your bank, life insurance and other relevant companies for benefits or a change of registration, you’ll typically need these two documents — an affidavit of domicile being your late spouse’s proof of residence, needed for investment responsibilities and tax purposes. You can get a death certificate from the local coroner’s office. Ledwith suggests asking for 10 to 20 copies, as you will need to provide one for each institution you work with. Your lawyer will supply you with an affidavit of domicile form.
Life insurance benefits: Once you have the necessary paperwork, notify your spouse’s life insurance company; it typically takes one to six weeks to receive payment, so the sooner you start the process the better.
COBRA health insurance: As a widow at least 55 years and older, you are entitled to continue your current health coverage for 36 months through the COBRA program. If you do not have other health insurance, you can apply for COBRA through your spouse’s former health plan within 60 days of when you would lose coverage or when you receive a notice for electing COBRA.
Your financial paperwork: To get a handle on your where you stand financially, you’ll need to have all your papers—including bank statements, retirement account information, pensions, etc. Don’t get bogged down by trying to figure out what you need and don’t need right now, though. Just put everything that has to do with finances into a box so you will have them when you’re ready.
Make a checklist of things you need to accomplish.
Once you have the crucial financial items done, the best thing to do is to make lists of the remaining items to get done. Ledwith suggests making a general list of what you hope to accomplish in three, six, nine, and 12 months, then make a list for each day of the week ahead for what you will tackle. For instance, you’ll want to look into any pensions your spouse may have had, social security survivor benefits, trusts, and other accounts where you may be able to draw benefits as a widow. You’ll also want to notify all the financial and insurance companies you deal with of your spouse’s death. If you have credit card debt, or now find yourself with an extra car you don’t need, these are all items to put down for dealing with in due time.
Don’t sell your house right away.
One major item on your to-do list will likely be deciding whether to move. It may seem like a given that you should sell your house, but again, don’t rush the decision if you don’t have to. “The biggest financial mistake widows make is selling their house too soon,” says Ledwith. “In general, this doesn’t have to be done right away.” Once you’ve had a chance to really assess your finances, you may find that you can stay in your house, if you want to.
Refrain from following your friends’ and family’s financial advice.
In Ledwith’s experience, well-meaning friends and family often offer financial advice, and widows go along with it because they’re too exhausted emotionally to deal with their finances themselves—or they feel guilty if they don’t let people “help” them. But this can lead to bad decisions. If you find that sorting though your finances is simply too overwhelming, a financial planner can help (check the Certified Financial Planner Board of Standards for a certified planner near you). “You need to find someone who has the heart of a teacher,” says Ledwith. “The widow tends to be very emotional and if the person you are working with is not compassionate then you should seek someone else.” Whether or not you use a planner, Ledwith emphasizes two things: It’s important to take your time and make decisions based on what is right and best for you.