Following the death of your spouse, you may find yourself functioning in a state of shock as you struggle to put one foot in front of the other. The last thing on your mind is probably your finances. However, there are some important financial challenges ahead as you navigate the days, weeks and months following your loss.
Highlighted below are three key financial challenges faced by widows.
Challenge #1 – Finding an advisor you can trust
When you are used to having a partner by your side to make decisions with, it can be difficult to figure out what to do on your own. Uncertainty over your future and the worry that you could make a wrong decision can lead to a form of decision-making paralysis. A wealth advisor can help you navigate your financial challenges, but whom can you trust to have your best interests at heart?
Whether you are looking for a new advisor or working with your existing advisor, it is important to make sure your financial professional is operating in a fiduciary capacity. An independent fiduciary advisor is held to a fiduciary standard, which means he or she is legally obligated to act in clients’ best interests. Being independent means the advisor is not obligated to sell products or investments, which allows him or her to offer advice that is free from potential conflicts of interest.
Challenge #2 – Weeding through irrelevant information
In today’s day and age, the 24-hour news cycle means that media outlets often serve as key influencers of public opinion. Turn on any news channel or scroll through social media, and you will find more financial advice than you can possibly consume in a lifetime. Unfortunately, much of the advice you will receive is skewed to favor a certain investment manager, strategy or point of view. And not all these are necessarily in your best interest.
So, how do you know what advice to trust? Again, it is important to ensure you are working with a fiduciary advisor who is legally obligated to put your best interests first. You may want to take it one step further and work with a CERTIFIED FINANCIAL PLANNER™ professional (also referred to as a CFP® professional).
In addition to serving as fiduciaries, CFP® professionals are held to stringent ethical standards, and they are trained to take a holistic approach to financial planning. This approach can help ensure all aspects of your financial life are working together in pursuit of your goals.
A CFP® professional can help you weed through irrelevant information and establish custom financial strategies that make sense for you, given your personal financial situation and goals for the future.
Challenge #3 – Taking it one step at a time
One of the biggest financial mistakes I see widows make is rushing into major life decisions too soon after losing a spouse. For example, some widows’ first instinct is to sell their home, thinking that it is too much to maintain on their own, or wanting to move closer to family. However, this is an irreversible decision. Months or years down the road, some widows regret giving up their homes.
I have worked with clients who decided to move across the country to be closer to children and grandchildren, only to discover they rarely see their family. As a result, they become increasingly isolated and lonely, living in a new town with no spouse and few friends of their own.
I typically suggest waiting at least a year after losing your spouse before making any big financial decisions. Even then, it is wise to take a test run before you commit to a big change. For example, before moving to be closer to family, schedule an extended visit to test out how you fit into your loved ones’ daily lives. Rather than selling your home over worries that you will not be able to maintain it on your own, try hiring a cleaner and yard crew to take care of the more difficult maintenance tasks.
When your spouse passes away, different financial tasks take on varying levels of financial urgency:
- Immediate –Financial issues you must tackle immediately include gaining access to accounts, paying bills, planning a funeral, etc.
- Important but not pressing –Tasks you must address soon but are less pressing include filing insurance claims, making a plan to pay off debt, updating your insurance policies, revising your estate plan, etc.
- Long-term –Long-term financial considerations require time and thought before you execute on them and include decisions about where you will live, when you will retire (if you have not already), how you will spend your time, etc.
I always recommend my clients slow down and take things one step at a time. Start by taking steps to secure your immediate financial needs. Then move on to those intermediate financial issues. Do not make any big decisions until your finances are stable and you have taken time to set some long-term goals.
Whether your husband passed away weeks ago or many years ago, it is natural to feel lonely, confused and vulnerable. While there are many challenges to face as you enter the next chapter of life, my hope is that I can make things a little easier by helping to guide your financial decision-making. Please reach out to schedule a conversation.
