Many people are simply not prepared to manage their finances after the loss of loved one. This is especially true if the deceased family member was the person who typically paid the bills and managed the investments for your household. There’s nothing to be ashamed of if you suddenly find yourself in this position, but as difficult as it may seem at a time like this, you may need to assume control of your financial dealings to avoid disaster.
Here are the financial steps to cover if you experience the loss of a loved one:
- What to do first (financially) after the loss of your loved one
- How to establish yourself as the primary financial manager of your household
- Tips on maintaining your finances over the long term
What to Do First
There’s no question that conditions will be emotionally and pragmatically chaotic immediately following the death of your close loved one. Having your finances organized beforehand is ideal, but even if they aren’t, here are some things you can address first to help make the financial aspect of this difficult season a little more manageable.
- Contact your financial professional(s). Your financial advisor will be able to begin organizing all your financial accounts and beneficiary information. It’s your financial advisor who will walk you through any necessary actions and paperwork so that you can navigate the financial complexities successfully.
- Recruit the help of a supportive family member. If you have someone who can be an objective and strong support person during this difficult season, consider letting them help you. Decision-making can be extremely difficult when you are (understandably) overcome with emotion. However, recruiting the help of a child, sibling, or other close family member may reduce how overwhelming finances can be after losing your spouse.
- Notify the appropriate people and agencies. These individuals will likely include your accountant, attorneys, insurance agents, and bank executives. Moreover, you will also need to schedule time to contact your mortgage company, credit card companies, investment brokers, and pension plan provider. Your financial advisor may contact some professionals on your behalf, or may let you know when it’s the appropriate time to contact them with what needs to be done.
- If possible, make sure that your essentials needs are taken care of the next 60-90 days. This includes things like paying the utilities, the mortgage, and any insurance premiums as quickly as you can. Take care of any regular financial obligations right away so you can manage everything else. A supportive family member is ideal for helping to make sure your mail is collected and bills are paid on time.
- Gather and organize any documentation that’s connected with your financial affairs. This includes bank statements, insurance policies, stock certificates, ledgers, deeds, etc. If you have this information organized in advance, it will be a welcomed convenience in the midst of a difficult time. If not, do the best you can to sort and work through the assembly of these important documents.
Establishing Yourself as the Primary Financial Manager of Your Household
Here’s a sampling of how to proceed after you’ve started managing your own finances:
- Modify your insurance coverage. While meeting with your insurance agent(s), discuss ways you can decrease costs or the amount of coverage you maintain.
- Make a comprehensive assessment of your finances. When you speak with your accountant and/or financial advisors, apprise yourself of both your current financial situation and your future prospects.
- Make the necessary adjustments. Based on the information you’ve gleaned, start to make whatever adjustments are necessary to ensure that your financial needs are taken care of going forward.
- Consider the possibility of downsizing or relocating in order to make up for lost income. Seek the counsel of a financial professional who has your best interest in mind to help you determine if this is a consideration for your specific circumstance.
Once you begin to take these steps, you will have transitioned into this new stage of managing your finances after the loss of your loved one.
Managing Your Finances Over the Long Term
- Here are just a few more tips to help you maintain your finances for the long-term independent of your lost loved one.
- Continuously educate yourself on matters of personal finance, investment options, and tracking the market.
- Create and adhere to a reasonable budget. You can start by tracking your expenses closely for 2-3 months and allocating resources appropriately.
- Schedule regular meetings with your financial advisor, to keep yourself abreast on your financial situation and future.
While it is true you should not make big decisions immediately after the loss of a loved one, it is important that the day to day management of home finances continue. While addressing your financial situation might understandably be the last thing you want to grapple with while grieving, with the right support from family and financial professionals, you can navigate through this difficult time.