Rebuilding Finances After Losing a Spouse

by Kristin Baird Rattini / July 15th, 2020

Few events change a life as completely as the divorce or death of a spouse. Your situation has changed; your economic needs as a widow, widower, or single parent will vary greatly from what they were as a married person. If you are dealing with this kind of loss, here are ways to help you put your assets in order and create a firm financial base for your future.

Take your time — Do not make any permanent financial decisions immediately. You may want to move to escape memories or be closer to adult children. Perhaps you're ready to max out your credit card to vent your frustrations. Don't. Put those urges aside until you've had enough time to learn where you stand financially and to decide what course of action is best. 

Set priorities —First, put your money in a safe place until you decide how to manage it. If you've just received a sizable settlement, you'll probably want to earn interest on the money in a safe, yet liquid account. Credit union staff can help you decide which type of account will work best for your immediate situation.

Second, make sure you're covered by medical and/or disability insurance. Call your spouse's employer to find out if you're still covered under the company plan. If not, you may file for a continuation under federal COBRA guidelines within 60 days.

Also, consult professional advisers to help you organize your finances. Most likely, you already have a lawyer. Consider talking to an accountant and certified financial planner as well; they're better qualified to answer your questions about assets, investing, taxes, and retirement. 

Get organized —While divorced individuals have assets tallied and divided during the proceedings, those who become widowed must sort out assets and usually are surprised to find out their net worth. According to the AARP’s Checklist for Family Survivors, you'll need to collect copies of the following documents:

Many of these papers may be stored in a safe deposit box, which some states seal after a death even if the box is jointly held. In that case, consult your attorney about getting a court's permission for access to the box.

Gather resources — You'll need these documents to claim the following:

Remember to transfer jointly held assets into your name, including credit union accounts and titled property, such as the house. You'll need to cancel joint credit cards and open new accounts under your name. Also, review your will and insurance policies; you may want to change beneficiaries.

Perhaps the greatest change you'll face is in your standard of living. Create a budget that matches your new financial situation and helps you make the transition. Many credit unions have their own financial counselors who can help you with this or can recommend qualified counselors.

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Printed Thursday, March 4, 2021

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