If you’ve lost your spouse, here’s what you need to know
When you’re grieving the loss of a spouse, making even simple plans can feel overwhelming. Yet surviving spouses inevitably face pressing tasks in the days, weeks and months of mourning that follow a loved one’s death, from paying bills to making long-term investment choices.
Everything from your income and your expenses to your risk tolerance may be different so your plan may need to be adjusted to your new circumstances.
For those who might not have been directly involved with handling the family finances these challenges can feel insurmountable, coming at a time when their ability to process information and their energy for handling new responsibilities is diminished, notes Kathleen Rehl, Ph.D., a published author and speaker on this topic. “Our brains function differently in times of deep grief. Cognitive thinking is compromised, attention spans are shorter and decision-making is more difficult,” she says.
The death of a spouse can also bring on a sense of urgency about finances, says Emily Brunner, Senior Wealth Strategist at UBS, who advises recent widows and widowers to resist making major financial decisions without expert advice. “People often become extremely risk averse when their spouse dies,” she says. “But you don’t want to sell all your investments and put everything in municipal bonds just because you’re feeling vulnerable.” Key takeaways
• If you’ve recently lost your spouse, making financial decisions can be extremely difficult.
• Prioritizing a few simple steps can give you some control over important financial tasks.
• Know your assets, and where they are held, so you get a complete list.
• Review any benefits you may need to claim, and discuss ways of distributing funds and claiming benefits with your Financial Advisor.
• Review your legal documents and update them where appropriate.
• Revisit your allocations based on your changed circumstances and needs.
• Speak with your Financial Advisor about what you might need to attend to, and what you can leave, during this difficult time.
These practical steps could help you begin forging a plan for your financial future.
1. Know what you have and where it is. Ideally, both you and your spouse know what assets you own, where they’re held and how to access them. If you can, you should take care of this before trouble arises, sharing all relevant information. In many couples, though, one spouse tends to have more involvement in paying bills and managing investments. In such cases, as a first step try to assemble a complete picture of all assets. “Figuring out what you have can be complicated now that everything is online and you don’t have statements coming in the mail,” Brunner notes. Ask for help, either from a close friend or your Financial Advisor, in gathering this essential information.
2. Check your benefits. Widows and widowers are entitled to a Social Security survivor benefit. Your Financial Advisor can help you determine the best options for claiming any Social Security benefit, since timing could affect the amount you receive.
Also, be sure to check with your spouse’s employer or pension plan about whether you’re entitled to any spousal benefits or other funds, including any life insurance payout, unpaid salary or bonuses, stock options, funds left in a flexible spending account or accrued vacation or sick leave.
3. Consider distribution options. Your Financial Advisor can also help you understand your options as beneficiary on any insurance policies, retirement accounts or other savings vehicles that your spouse may have had. These decisions can have a long-reaching impact on your overall benefit, your ability to access funds and the amount of taxes you’ll pay when you do.
4. Review your documents. If you’re like most couples, you and your spouse probably named one another on documents like advanced healthcare directives and durable powers of attorney. If the named beneficiary dies, the next person in line will automatically move up.
However, you may find that you’re not comfortable with all of your backup appointments simply moving forward. “For example, you might have listed children who’ve dispersed around the country as your secondary healthcare proxies,” explains Brunner. She suggests revisiting each document to ensure that the primary agent is someone who understands your wishes and will be able to serve as your proxy.
5. Revisit your allocation. Meet with your Financial Advisor to make sure your investments still meet your needs. “You have to think about your investments in the context of your own financial planning,” Brunner explains. “Everything from your income and your expenses to your risk tolerance may be different, so your plan may need to be adjusted to your new circumstances.”
6. Practice saying “no”— or “not now.” The recently widowed are often besieged with requests for money, including pleas from legitimate charities and advice from well-meaning family members as well as sales pitches for investment opportunities. Rehl notes that surviving spouses should take care not to be pressured into financial decisions during this vulnerable time. “Stand in front of a mirror and practice saying, ‘That sounds like a good idea but it’s too early to think about it. I will talk to my financial planner about it when I’m ready,’” she suggests.
Losing a spouse can be devastating. Having a way forward can help you address immediate needs, and put off what you don’t need to deal with right away. Contact your Financial Advisor, who will help you with these challenges in whatever way possible.
• As a firm providing wealth management services to clients, UBS Financial Services Inc. offers both investment advisory and brokerage services, which are separate and distinct, differ in material ways and are governed by different laws and separate contracts. For more information, please speak with your Financial Advisor or visit our website at ubs.com/workingwithus.
UBS Financial Services Inc. and its affiliates do not provide legal or tax advice. Clients should consult with their legal and tax advisors regarding their personal circumstances.