How to make financial order after loss of a spouse

Can anyone understand how it is to have lived in the White House and then, suddenly, to be living alone as the President’s widow? – Jackie Kennedy

'Life Support Marriage,' oil on gessoed arches paper (photo credit: JUDITH MARGOLIS)
'Life Support Marriage,' oil on gessoed arches paper
(photo credit: JUDITH MARGOLIS)
I’ve mentioned in this column how in my business I seemingly get waves of clients who pass away. Nothing for months and then all of a sudden I’ll get 4-5 calls over the span of a month informing me that a client has died. Maybe it’s because of the mounting death rate due to the novel coronavirus, but I feel that I am again in the midst of one of these waves. Not necessarily clients but it just seems I am hearing about so many people passing away. The past few Thursday nights have been spent unfortunately attending Zoom funerals.
Just after Sukkot, I spoke with a man who had lost his wife about a year ago. He explained that he was never really involved in the family finances, and that in the breakup of household responsibilities his wife took care of the money. A year after her passing and he admitted that he was still overwhelmed. He felt that he had lost complete control of his financial life and didn’t even know where to start. He hadn’t taken care of anything yet and his kids were pushing him to start making financial order. He decided to go online and start reading some personal finance articles and then he decided to pick up the phone and call me. Thankfully he’s getting everything in order and starting to get organized.
Unfortunately, I have had my share of meetings with both widows and widowers who have not managed to take control of their financial situation. Here are some money tips to help you take control if you lose your spouse.
Make a list
Make a list of all the things that need to get done. Copies of the death certificate are critical in order to start making order and getting things moving. Speak to friends who may have already gone through the process. Don’t hesitate to speak with your lawyer, accountant and financial adviser as they will be knowledgeable in the processes needed and will be a source of a lot of information that may be needed to start sorting things out.
How much money is needed?
Figure out how much money is needed on a monthly basis.  Wait a few months to try and determine how much money is required. The reason to wait a while is that you may have all kinds of immediate expenses that will skew your budget, and give you an inflated figure of what you need. After things calm down, start to track expenses. Break your expenses down to those that are monthly and those that are annual, one-time expenses. Once you have that organized, write down all of your various sources of income, salary, social security, pensions, rental income... etc. This means that once you know how much money enters your bank account each month, create a budget that limits your spending to the amount of income you have.
After defining cash flow needs, investment allocation decisions can be made. If income is less than expenses, the money can be invested to generate income to supplement the monthly shortfall. Conversely, if expenses are lower than current income, more growth can be allocated to the portfolio. If your spouse managed the portfolio with individual stocks, don’t feel pressure that you need to do the same thing. It may be smart to speak to a professional to make sure the investments are allocated for your new reality.
Take a deep breath
Don’t make any important financial decisions for a few months. Don’t worry that your money may not be “making” money. It’s much more beneficial that no rash decisions are made because bad decisions can have long-term negative consequences. If you receive an insurance payout, or think you will need to move to be closer to a child and you want to sell your apartment wait. The death of a spouse is emotionally devastating enough. You don’t need to add more stress by making immediate life altering financial decisions. Nothing will happen if you take your time.
The death of a spouse is emotionally devastating, but you need to continue living your life. By implementing these tips, you can start taking control of your financial situation, which to some degree will help enable the healing to begin.
The information contained in this article reflects the opinion of the author and not necessarily the opinion of Portfolio Resources Group, Inc. or its affiliates.
The writer is author of the book Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing. www.aaronkatsman.com or [email protected]