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Jordan Goodman is the author of Everyone's Money Book, available at 888-201-6300. This is the third edition of the book. You can also visit his Web site at www.moneyanswers.com. He talks with us on Thursday mornings.
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March 6, 2003
"Financial Survival for the Widowed"
 Listen
It’s never easy to think about becoming a widow or widower, but with the
threat of war and terrorism all around us, now is as good a time as ever.
There are various financial steps you should take, in any case, but
particularly if your spouse may be in harm’s way, either overseas or
domestically.
The AARP estimates that there are 13 million widowed Americans, 11 million
of them women. Many of these women have never handled the family finances
before, so the prospect of managing money in the midst of grief is
particularly difficult.
Here are a few steps you can take to prepare:
- Make sure you know where all the important papers and documents are,
including insurance, banking, brokerage, mortgage, house deeds, wills, etc.
When someone dies, it is very difficult to pull all of these papers together,
and just adds more stress to the whole situation.
- Make sure your credit record is accurate, and each spouse has established
separate credit. Often, when a woman is left behind, she has not established
credit in her own name, and it makes it very difficult on her.
- Have an adequate amount of liquid assets around. If someone dies, you don’t want to have to sell assets like stocks, mutual funds or houses in a "fire
sale" to raise cash to live on.
If your spouse dies, here are a few steps you should take right away:
- Apply for benefits: this may include employer benefits, like life insurance
or pensions, Social Security survivor benefits and Veteran’s benefits.
- Invest lump sums conservatively: You may get big lump-sum payouts from
life insurance policies, 401 k’s and IRAs. Don’t rush into any investment
decisions, so keep the money liquid for a while before you figure out how to
invest it for the long run.
- Talk to creditors: Call up creditors, like credit card issuers, mortgage
companies, student loan agencies and so on, and tell them you have lost your
spouse. They may be more forgiving in trying to collect from you if you miss
payments. You also want to get your name only on loans that might be in
joint name.
- Update all your accounts: You may have joint names on many assets like
your home, cars, insurance policies, brokerage and bank accounts.
Change the names to just yours.
The emotional toll of losing a spouse is hard enough; the least you can do
is prepare by making the financial transition as easy as possible. For more
suggestions on this topic, take a look at http://www.unwantedchange.org, sponsored
by the Bond Market Association.
For More Financial Tips From Jordan Goodman
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