By Craig Childress, CFP®
While it’s impossible to emotionally prepare for the loss of a life partner, you can take steps to put a sound financial plan in place. It can make a difference knowing you won’t be overwhelmed with financial burdens during such a devastating time.
As difficult as this process is, preparing for the unexpected is always better than trying to pick up the pieces on your own after a loss occurs. Ask yourself the following questions to help you create a financial plan to put your loved one at ease.
Do You Have a Trust in Place?
If you and your spouse do not have a trust, consider drawing one up in order to control where your assets go now, and in the future. A trust ensures assets are protected and disbursed to the right heirs. You can have both a will and a trust, but while a will takes effect after one’s passing, a trust can be used both during life and after one’s passing. (1) Be sure to ask your advisor about state laws when it comes to the differences between wills and trusts. For instance, in New York State a will must go through probate court, while a trust avoids probate court.
Without a trust, it can take longer to get closure, and the details about how assets should be passed on can get messy in the process. If you do have a trust, make sure it’s up to date by working with a qualified estate attorney to get all the legalities in place.
What Benefits Are Available to You?
Understanding your benefits is another important aspect in preparing for the possibility of widowhood. Things like Social Security, life insurance, pensions, and annuities should be assessed ahead of time so that you’re not struggling to make difficult financial decisions immediately after loss.
If your spouse is still working, there may be other employer-sponsored benefits available as well. Work together with your loved one to make a list of all the benefits either of you will receive in the event of widowhood as well as the information needed to access these resources. As difficult as it may be, talking about these benefits ahead of time can help you both feel prepared if widowhood were to happen.
Do You Have Access to All Financial Account Information?
One of the hardest parts of widowhood is moving forward without the support of your spouse. Maybe they were the one who handled all of the day-to-day financial matters and now you are stepping into this role for the first time in your life. It can be overwhelming to say the least.
The best way to prepare for this possibility is to make sure both spouses have access to important financial account information including checking and savings accounts, retirement plans, and other investments. At a minimum, both spouses should have access to the account numbers and any login information. Also keep in mind that in some cases, settling an estate may require a birth certificate and/or marriage certificate (even if you are divorced), so it’s important to keep these in a safe and accessible location.
Additionally, understanding how these accounts are titled (joint or individual), as well as who is listed as the beneficiary, are crucial aspects of estate planning. Having joint ownership on all accounts, or listing each other as beneficiaries, can help the assets transfer smoothly by avoiding probate.
What Does Your Spending Plan Look Like?
Life after widowhood will be challenging, but a detailed spending plan can help ease the transition by alleviating the stress of making day-to-day financial decisions. Start by creating a current budget, if you don’t have one already. Together, you and your spouse can discuss the types of expenses that will either be added or removed from the budget if widowhood were to happen. It may seem strange in the moment, but it can be an incredible aid when planning for the future.
Special attention should be paid to debts like mortgage payments, monthly utilities, car payments, credit card debt, and other loans. Understanding how these debts will be managed in the event of widowhood is crucial to creating a sound financial future for the surviving spouse. The last thing either spouse wants to do is leave behind debt that their loved ones can’t manage. Planning ahead can help alleviate this burden and provide comfort to both spouses knowing that their partner is going to be okay on their own.
Do You Have a Trusted Advisor?
Having a strong support system will carry you through widowhood and it will give you the strength to move forward. Part of that support system should be a trusted financial professional.
Whether you are working with a financial advisor already, or you are looking to hire one, take your time getting to know them and make sure you like working together.
If there is one spouse who tends to handle all financial matters, make it a point to introduce the other spouse to the financial team. Widowhood is a vulnerable time and it’s vital that both spouses feel comfortable reaching out for help with important financial matters. If one or both spouses don’t trust the advisor, it may be necessary to reevaluate the relationship.
Your well-being is of the utmost importance during this process, so don’t be afraid to interview several financial professionals before choosing the one you trust the most.
You’re Not Alone
We at Oswego Wealth Advisors want to help remove financial uncertainty so you can spend more time enjoying what (and who) matters most to you. We can assist you and your spouse as you navigate the difficult decisions associated with the possibility of widowhood. To find out more, schedule an introductory phone call or reach out to us at 503-342-2249 or craig@oswegowealthadvisors.com.
You can also request a free copy of the book In Case You Get Hit by a Bus to help you get on track to better organization.
About Craig
Craig Childress is Wealth Manager and a CERTIFIED FINANCIAL PLANNER™ professional at Oswego Wealth Advisors, an independent firm in Lake Oswego, Oregon, dedicated to helping their clients remove financial uncertainty so they can focus on what matters most. With over 35 years of experience, Craig employs a personal approach to help people find solutions to their financial needs and concerns, set goals, clarify their values, and design a plan that aligns their money with their values. He does everything with purpose and intention, and cares deeply about his clients and their families, desiring to equip and empower them to work toward financial freedom and a fulfilling life. As a Fiduciary, Craig puts his clients first, always, and provides transparent guidance that makes a significant difference in their lives. When he is not serving his clients, you can find Craig involved at River West Church, serving the community here and abroad through the Lake Oswego Rotary Club, reading, gardening, or playing his guitar. He loves spending time with his family, especially his wife, Terri, and their grown children. To learn more about Craig, connect with him on LinkedIn.
______________
