The passing on of a spouse can be quite a painful experience. Especially if the death comes about rather suddenly. The bereaved spouse is left stranded in more ways than one and that tends to affect the decision-making ability in the short run at least. The key to financial health after the death of a spouse is to not act emotionally when it comes to money. The author has listed out common financial missteps in such a situation. Team RetyrSmart
Don’t compound the trauma of the loss of your spouse with poor financial decisions
Being aware of possible financial missteps can help you take the necessary steps to avoid just that
MAKING MAJOR MONEY DECISIONS
When your partner passes on, some major decisions and changes are inevitable. However, some decisions which seem smart and logical might not be so in a few months’ time. When you’re grieving, your mind functions differently and it’s not the time for major decisions. The point is, think carefully before making any major financial decision.
BEING TOO TRUSTING
After losing a spouse, it is understandable that you have your guard down. You might therefore end up trusting too quickly and blindly. Many con men know how vulnerable one is soon after their partner passes, which makes it an opportune time for them to pounce on their unwitting victims. When grieving, be wary of “sales people” or “financial advisors” who suddenly appear with seemingly great deals and want to befriend you
NOT COLLECTING YOUR MONEY
In the fog of grief, material wealth might seem insignificant. Many grieving spouses end up not collecting money which belongs to them. These might be death benefits, money their spouse loaned to others, accrued unpaid salaries or bonuses, life insurance claims, profit sharing owed or pensions. Check through your partners financial records to make sure you collect any money owed to them and you. Call their employer, business partners, and pension carriers as soon as possible to discuss any pending financial matters.
NOT UPDATING LEGAL DOCUMENTS
Updating legal documents is an important step that many bereaved spouses defer for too long. First things first, apply for and obtain a death certificate as soon as possible – you will need it to process many legal documents. Update your will, any trusts you have in place, next-of-kin in legal documents, and beneficiaries in your own life insurance policy or financial investments. You’ll also need to change any assets listed in your spouse’s name. To have a clear plan, make a list of all the bank accounts, insurance policies, loans, credit cards statements, mortgages, retirement plans, and brokerage account. Then take the necessary notification steps.
NEGLECTING THE FAMILY’S FINANCIAL FUTURE
It might seem too soon but you should take steps to ensure your family’s financial
security if you were to also pass away. In cases where the deceased was in charge of making money decisions, the bereaved might find it empowering to suddenly be in control of the purse strings. Many bereaved spouses might also fall into the trap of doling out money – as monetary gifts or loans – to all and sundry. Think carefully about who you give money to and why. You are now down to one income and might have to live more frugally.