Becoming widowed isn’t something women spend much time thinking about. Whether they’re newly married or been married for decades, women –and men too for that matter – spend more time thinking about their joint deaths and how they want to care for the kids than they think about living life alone without their spouse. We all just think we’re going to die together, but this rarely happens. Statistics tell us that most women live 10+ years after their husband’s passing. Those years, especially the early ones, can be filled with loneliness, fear and all too often pressure to “just do something”. While the mourning process has to unfold, it is our hope that we can help those recently widowed from making mistakes which will only complicate an already difficult time in their lives.
As mentioned above, women tend to live longer than men. Women also tend to marry men a few years older than themselves which only makes the likelihood of surviving after their husbands more likely. Traditional gender roles can also complicate these demographic realities. Women often allow their husbands to take on the primary responsibility of preparing for the financial issues of retirement. As a result, many widows aren’t as familiar with investing, insurance and taxes as their deceased husbands were. Even for those women who have had primary financial responsibility during the marriage, taking care of these same issues while also dealing with grief increases the possibility of critical mistakes.
So common is this situation, that a number of books have been written on the topic. Some of them are good; others not so good. But in the early phase of living life single again, books –even the short ones – may just be too much to tackle. In the meantime, we offer some brief advice for the recently widowed on how to avoid the most common mistakes.
TACKLING EVERYTHING AT ONCE
There are some tasks which must be done within a month or two of a spouse’s death. You have to pay the bills, pay quarterly taxes if needed, keep any health insurance in place, and collect on any life insurance policies. This last point can be critical if cash flow is tight.
But just about everything else can wait a little longer. You don’t need to take action or make decisions on the other issues for a while. An excellent rule of thumb is to not make any irreversible decision within the first year after your husband’s passing. Very few people, if any, think as clearly when burdened with overwhelming emotions like grief as they do when the emotional intensity has subsided.
Waiting can be hard to do. Wanting to close a chapter and get on with life can be a siren’s call to a financial mistake. One common example is the desire to pay off the mortgage with any insurance money that is received. That may cause regrets and difficulties later if more liquidity is needed in later years. Once the mortgage is paid off it isn’t so easy to get a new one. You can always pay off a mortgage later, but you cannot always get another mortgage.
PREYING ON THE RECENTLY WIDOWED
Your husband’s passing is often an occasion for a public celebration of his life. The funeral is a wonderful time for family and friends to gather around to comfort you and celebrate the many years you had with your husband. But nice people are not the only ones who pay attention to obituaries. There are in fact people who will prey on the recently widowed, and often times, they succeed. Rogues and pirates know that many surviving spouses immediately crave security and are particularly vulnerable to offers of “regular” or “life-long” income that never runs out. Here, you must be strong. You will hear from people selling all types of annuities and other investments which tend to benefit the salesperson more than the widow.
This is not to say that all investment opportunities or annuities are bad. Avoiding all of them is as foolish as embracing all of them. Here, the first rule (give it time) is joined with the second – seek advice from someone objective. Have an independent, fee-only financial planner review any financial product before you sign on the dotted line. Fee-only planners do not sell any produce, stock, bond, mutual fund, annuity, insurance policy, etc. to anyone. They do not accept commissions and thus have no conflict of interest. Equally important, they do not have the burden of the emotions you’re experiencing at this time. They can think clearly for you and help if important decisions must be made.
To some people, a home is just a house. To others, the home is also the nest where life was made together, where babies were brought home to grow, where memories were ingrained and remain comforting. Along with these wonderful things, though, comes maintenance and other realities of being single.
Even if the mortgage and real estate taxes seem manageable to you, there is the lawn to be mowed, snow to be removed, and an endless stream of repairs to be made. Those “honey-do” lists now have to be done by you, and they may pose unanticipated challenges. There are the physical aspects of getting up on a ladder to repair a gutter, wielding a hammer or saw if you choose to do them yourself. If not, you have to seek outside assistance – the neighborhood handyman, the appliance repairman – and you’re again faced with the need to discern the competent and honest from the rogue and pirate.
Fear also can take up residence in this once safe and secure place. The empty house can be terrifying. Once-pleasant memories can often become a source of sadness and a reminder that the sounds of your spouse puttering around are no longer yours to enjoy. These can prompt you to make rash decisions. One widow with whom we worked too quickly took up her son on his offer to move in with his young family. The stages of life clashed, and the distant city in which he lived didn’t offer the familiarity and companionship that was expected and needed. In hindsight, this widow told us she would have been wiser to make long visits to her son’s (and daughter-in-law’s) home to get a feel for the situation before making the big jump.
FINANCES FOR THE RECENTLY WIDOWED
Unfortunately, annuity salesmen aren’t the only ones who see widows as a source of income. People much closer to you may entertain the same thoughts. Sometimes adult children request an “advance on their inheritance” with the expectation that it’s somehow their money. We have been blessed in this country over the last 50 years or so to live in an era when for many families there is a reasonable expectation that there will be something left for the kids when mom and dad are gone. But that was not always the case, nor has it been the norm throughout history.
Latter day America is the first society in which large scale wealth transfer is common. In previous eras and places, kids were lucky if they could take over the family home, and often they did so with the requirement that they take care of mom and dad who still maintained residence there. Manipulative kids will push all the emotional buttons. “How can you deny me this when I’m going to get it anyway”, or “Dad would have done this if he was still here.” The reality is that the money and assets your husband left you are yours. You have the right to use them for your own needs and enjoyment. There is no legal or moral requirement that you save something for the kids or give away your assets. If you can afford to do so, it’s a blessing, but it is not an obligation.
Saying no is not easy, so here again, having a trusted objective advisor can lift a huge burden and maintain family relationships. You can let a financial planner or accountant be the heavy. We have often served in this capacity for our widowed clients. We see the objective needs and without reservation can explain why mom cannot fund a kid’s lifestyle. Also, though, if you do decide to advance the inheritance, put it in writing so you spare your kids’ relationships with one another from the confusion and hurt associated with one child feeling as though their sibling received an unfairly larger slice of the inheritance.
In this category of piggy bank robbers, we also have to include the not-so-gentlemanly callers. Way too many men out there are seeking purses and nurses. Too many of them will assume you’re a soft touch and that with a little flattery, some flowers, and a nice dinner or two you’ll be willing to sign on to meet their financial needs and care for them.
Now, not all adult children are greedy and not all suitors are gold-diggers, but with mourning, loneliness and fear comes vulnerability. You will have to learn to say no – or have someone do it for you – and be cautious in new relationships with members of the opposite sex.
CONTROLLING FROM THE GRAVE
Once you’re a widow, your budget and financial needs will be different than what they were when your husband was alive. There are no rules or statistics to suggest that you’ll need more or less money than what you needed when together. There’s too much variability in terms of lifestyles, health issues, housing and location to draw conclusions other than to say it will be different. Unfortunately, many men try to dictate financial advice from the grave.
It’s usually done with the best of intentions, but it can be terribly misguided. We know of several cases in which the husband and wife created a trust 30 years prior to the husband’s death and never updated the trust to reflect the changes in family composition and living expenses. These documents can stipulate that only specific investments be used and that a specific monthly allowance be provided the surviving wife. The problem, of course, is that investments and living costs change. Without language allowing for reasonable adjustments to the changing realities of life, trusts and wills can feel like shackles and seriously impair your ability to succeed financially without your husband.
PREPARATION FOR THE RECENTLY WIDOWED
There are few more trying events in life than losing your spouse. On top of that, the death of your partner can also unleash a stream of financial risks. Preparing for this while you’re both alive can help the transition. Update your wills and trusts while both of you can decide what flexibility will be needed. Should you find yourself a widow, take time to make your decisions and solicit advice from honest, objective and dispassionate sources. While you will inevitably feel alone, there are ways to ease the burden and to find those who will walk the path as your friend and ally. If you find yourself recently widowed, don’t wait. Seek advice from an objective source. If you feel like you need help, or even if you would just like a second opinion, we’re always here to help.