Losing a spouse is one of the toughest experiences you’ll face. You aren’t thinking straight, you’re overwhelmed, and even if you think you’re dealing with it well, you won’t be in a position to make the best financial decisions. Unfortunately, many widows and widowers don’t realise this and commit to large purchases whilst in the mourning phase.
This is known as a widow money mindset, where you spend money because you’ve lost your partner. In your subconscious, your money and assets can represent theirs, so you ignore it or get rid of it without realising. It can go the other way, too, and you can find yourself worried about losing half your income whilst facing the same financial obligations, so you make hasty decisions.
Here are our five steps for managing your wealth if the worst should occur and you lose your life partner.
1. Review your budget and retitle assets
Inevitably, your finances will look different if your spouse passes away. As a result, you’ll need to review your budget to account for changes to pensions, regular outgoings, and other sources of income.
While it’s not pleasant, you’ll also need to retitle assets such as your home and any other property you own. An estate planner can help with this to reduce the burden and ensure that no mistakes are made.
Bills and other outgoings in your spouse’s name will also need amending so make some calls to update supplier records. Credit reporting agencies may need contacting, too, as well as your spouse’s bank and insurance provider.
2. Reconsider your tax situation.
After a spouse’s death, your tax options will probably change. You’ll need to make sense of where you stand and learn about the requirements you now need to meet.
Doing this alone or seeking advice from Google or AI tools may present problems, so it’s always best to speak to a human financial expert. Choose one with experience dealing with similar situations to the one you’ve found yourself in.
3. Review your insurance requirements
Did your partner have life insurance? It’s time to contact the provider to discuss payouts. You should also ensure that you have your own health insurance in place.
In addition, you’ll need to think about how you’ll use any insurance payouts and the most effective way of handling your newfound finances. This might include paying off debts, creating an emergency fund, or something else entirely.
4. Ask for help
Tackling financial matters alone when you’re mourning isn’t wise so speak to a grievance counsellor and a financial planner. Doing so will help you manage the financial and emotional side of losing the person you love.
It’ll also help to get all of your eggs in a basket regarding your assets, investments, stocks, and savings. Having everything in front of you gives you some perspective and a better understanding of how to move forward, and speaking to an expert helps make sense of it all.
5. Take your time
The most important piece of advice when dealing with finances after the loss of a spouse is to take your time. Don’t rush and don’t make any significant financial decisions you might later regret.
Feelings are raw so don’t be tempted to sell major assets or make large investments at an early stage, either. Instead, give yourself space to mourn and revisit these matters, unless they’re time-sensitive, when you can think clearly.
Conclusion
Losing a spouse is an extremely difficult time for anybody. However, by being rational with your finances and seeing professional advice, you can grieve properly without sacrificing your financial security.
For advice around wealth management, speak to the experts at Cedar House Financial. Call us on 020 8366 4400 or email enquiries@cedarhfs.co.uk to discover how we can help.