What if one of you passed away tomorrow. What happens?
Seven-and-a-half years ago, Kristen Brown’s husband died of a heart attack at age 30.
“He had just been given a clean bill of health and was a former college athlete,” said Brown, now 38, who lives in Minnesota in the US and is the author of the book, The Best Worst Thing. “We had a 10-month-old daughter.”
Even as she grieved, Brown had to grapple with challenging practical matters. “How do I get access to his accounts? How do I apply for social security death benefits for my child? How do I figure out the insurance stuff? For the first year, I was terrified. We had a two-income household that suddenly went to one.”
Losing a spouse is heartbreaking, yet it’s a prospect that many will face. In the US, 800,000 people are widowed each year, according to the Census Bureau. In the UK, an estimated 500 women become widows every day, according to the Women’s National Commission.
And China and India lead the globe in sheer numbers, with 43 million and 42.4 million widows, respectively, according to a report from the United Nations.
“Death is not unexpected,” said Carol Brody Fleet, US author of Widows Wear Stilettos, whose first husband died in 2000 after a two-year battle with ALS, or Lou Gehrig’s disease. “The only thing we don’t know is the date. It’s going to touch all of us in one way or another, and for that reason it’s incumbent that we are prepared for the eventuality.”
Here are some suggestions for coping.
What it will take: Surviving the death of a spouse requires stamina and a solid support network, as well as organisational skills. You will also need enough cash to cover funeral expenses, which average £3,600 ($5,486) in the UK and $7,000 to $10,000 in the US. (For insights on keeping costs on check, please see:The high cost of grief.)
How long you need to prepare: Before the worst happens, it’s important to take a day to ensure your affairs are in order. Make sure both partners have appropriate, updated estate documents such as wills and powers of attorney, and that each person prepares a list of all accounts, along with user names and passwords. While advisors suggest having money put away to cover funeral expenses, if possible, many don’t recommend prepaid funeral plans, which come with potential risks. “They can turn into an absolute nightmare in the worst-case scenario,” said Russ Thornton, a financial planner with Wealthcare Capital Management in Georgia in the US. “There are better ways to plan for it financially.”
To motivate you to plan ahead, try what Thornton refers to as a lifeboat drill. “What if one of you passed away tomorrow?” he said. “What happens? Do you know where your accounts are held? It’s an important mental exercise.”
Once a spouse dies, it can take six to 12 months to settle an uncomplicated estate, and up to two years if things are more complex. If yours was a blended marriage, there are a lot of assets or there was a family owned business, expect the timeline to be on the longer end.
Do it now: Notify everyone. Every relevant financial entity must be informed that a spouse has died. This includes banks, investment firms, insurance companies, motor vehicle licensing, credit cards, utility companies, retirement plans and government benefits offices. “People often forget to notify the deceased’s financial institution and continue to use their bank account, which could create legal problems,” said Brett Evans, executive director of Atlas Wealth Management in Southport, Australia.
In the UK, you can notify the Bereavement Register, which stops mail being sent to the deceased, suggests Age UK. In Australia, you must fill out an Advice of Death form to notify the Department of Human Services.
If your loved one had social media accounts or another online presence, look into downloading any information or photos you’d like to keep and deleting or deactivating the rest. Each online account has instructions. (For instance, here’s what Facebook has to say.)
Get multiple copies of the death certificate. You’re going to need one to close every account held in your spouse's name. It was one of the things that surprised Kristen Brown, who used almost 20 to settle her husband’s estate. “You need so many copies,” she said. “I even needed one to close a Kohl’s charge account he had.”
You may also need a copy if you travel with children internationally. “I have been asked at border patrol to show my husband’s death certificate to prove I’m not removing my daughter from the country without his knowledge,” Brown said. “It doesn’t happen every time, but be prepared.”
Start estate proceedings. If your loved one had a will, “notify your solicitor or lawyer, as well as the executor of the estate,” Evans said. “You can then plan the next steps, ensuring that everything you do is legally correct and compliant.” If there was no will, the state will name an executor or administrator of the estate. The laws vary depending on where you live. In some US states, for instance, the spouse automatically inherits everything, but that’s not the case everywhere. In New Zealand, for instance, the estate is divided among the spouse and children.
Take an inventory. Settling your loved one’s estate could be complicated, depending upon family structure, relationships and whether your spouse conveyed his or her wishes clearly before he or she died. Walk through your house and take photos or a video of contents and valuables following your spouse’s death. “Even in the most communicative of families, issues invariably arise over who’s going to get what,” said Sally Hurme, an elder law attorney with AARP and author of the Checklist for Family Survivors. “A video representation can be very valuable.”
Consult a professional. Some financial transfers involve reams of paperwork and some have tax implications, so someone with a complicated estate should consult a financial advisor you trust. “It may be appropriate to reevaluate your financial plan, because your needs may be different,” Hurme said. “There may be life insurance proceeds that need to be invested, or there may be a reduction in social security or pension benefits.”
Look carefully at income and how long it's going to last. For instance, in the UK you will continue to receive the Married Couple’s Allowance for the rest of the tax year but not after that.
Do it later: Ignore Uncle Marty. “You will get a lot of free advice from well-meaning friends and family,” Hurme said. “They’ll say, ‘You ought to invest in this wonderful stock’ or ‘You need to sell your house tomorrow and move in with us’. Take your time and be sure you have good financial advice.”
Give big decisions some time. “I think a lot of widows feel they need to get knee-deep into what to do with their investments,” Thornton said. “It’s best to let the dust settle. Give it a few weeks or a couple of months to get your bearings and begin to adjust.”
Consider whether your circumstances must change. Depending on your age and that of your children, you might be better off downsizing or moving closer to family. “Ultimately, you’ll need to think about whether you’re living in a community or city that makes sense long term,” Thornton said.
Do it smarter: Understand that people will say stupid things. “At least one person you know is going to say something insensitive or goofy,” Fleet said. “My hall-of-famer was at my husband’s funeral, and I was told that I would forget all about him when I got a new boyfriend. I still don’t have a comeback for that one.”