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WIDOWS -  What to Do in the First Year
Byron R. Moore, CFP^TM
February 23, 2002

Question: My father recently died in his mid-fifties. It was a shock to us all, and my mother is taking it especially hard. What financial issues do we need to be concerned with, since she is leaning on me for a lot of help during this time?

Answer: Having worked with many recently widowed women, I assure you that your “being there” for your mother is doing more for her at this time than anything else.

Sometimes grief can be so overpowering that one’s judgment is impaired. Much long-term financial damaged has occurred in the wake of a grieving widow or widower seeking some relief from their pain.

It is during those times that a loving, adult child or close family friend needs to step in and offer firm, loving advice.

So let’s review some of the major things you need to consider when counseling your mother:

Do only what is absolutely necessary. There is enough that has to be done NOW. Most of the time, you do not need to make a hasty decision about selling a house, paying off a mortgage, moving, retiring, changing investments, etc. 

Obtain multiple copies of the death certificate. You will need the death certificate to make many of the financial changes you must make over the coming months – everything from changing the name on your bank accounts to getting Social Security and life insurance benefits.

Apply for death benefits. Most insurance companies will give you an option for how you receive the death benefit. In addition to your father’s personal life insurance, make sure you check with your father’s employer about any company provided savings plans or life insurance benefits. Check with Social Security. 

I usually recommend that you let them send you a checkbook and keep the money on deposit with the company for now. This is not a good long-term plan, but it will protect you from litigation and scam artists who prey on widows. It is a safe place for the money for now.

Know where your cash is. Hopefully, your mother either has life insurance benefits coming to her, or your father had enough assets saved to do the job. Life insurance benefits can take two to four weeks to come in. So review all your mother’s checking and savings accounts. 

Make a short-term spending plan. It will take you at least three months to get her initial financial situation stabilized, and even after a year there will be a few loose ends to tie up. So make sure she doesn’t over-spend her resources. 

Try not to dip into retirement accounts or investments to raise spending money. Do some simple forecasting of her spending needs for the next three months and over the next year. Make sure you can make it match up to what money she has to spend.

As simple as this sounds, if she has not been the bill payer in the household, make sure she gets in a regular routine of paying her bills. You may be tempted to perform this function for her. And that may be OK for a short time. But you’ll do her no favors by making her dependent on you to do these simple activities of financial life. Even if you start out doing so, she should be paying her own bills within six months.

Notify financial institutions. You need to notify your bank, investment company, insurance company, mortgage company, department of motor vehicles, Social Security Administration, etc. as soon as possible.

The Financial Planning Association has an excellent document every recent widow should obtain. It is called “Coping With Death and Injury: Financial Considerations in Time of Need.” You can get a copy off their web site (http://www.fpanet.org/plannersearch/coping.cfm). Or feel free to contact my office – we’ll be glad to get you a free copy.

This brief list above just scratches the surface. There are many things to do in your journey ahead. I will not patronize you or your mother by saying it will be easy. But you can do it. If you’ll take it one step at a time, and ask when you need help, you can minimize the financial burdens associated with the death of someone you love.