What financial moves to make if you are recently widowed?

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What financial moves to make if you are recently widowed?

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Personal Finance 101: Generation X Series – 5 Big Mistakes Gen X’ers Make With Their Money

September 30, 2011

When my father passed away many years ago, I remember how traumatic life can be for the person left picking up the pieces. My mom was a schoolteacher, and she didn't spend very much time looking into the family finances. She pretty much left almost all of the financial decisions up to my father. When there is a loss of a loved one, trying to make important these choices can be a tricky and treacherous time of your life. Let alone figuring out how to take care of yourself and your children for their day to day needs, making the right financial moves when you are recently widowed can help you create a more stable future.

Here are five smart money moves to make if you are recently widowed:

  • Take your time - Don't make any rash irreversible decisions in the first 90 days. Sometimes widowers act quickly to sell a piece of property or move existing investments around, but don't do anything for the first three months. It may take that long to acquire statements of accounts you were not aware of before, and gather all of the family financial data into one singular place. You may be getting calls from various salespeople trying to sell you on investment ideas that may not make sense for you. Gather your inventory, and then in the fourth month begin plotting out the smartest financial decisions.
  • Review everything from your spouse's company - If you were on your spouse's health insurance; make sure you understand how it works to see whether or not you can continue on their company health insurance. There may have been stock options, pension plans, or other corporate benefits so make sure to call the benefits and human resources department to ascertain just what is available to you.
  • Contact all places where you are a named beneficiary - It is important once you have the death certificate to contact all life insurance, IRA, 401(k), and Transfer on Death account to make sure you receive the proceeds where applicable or shift ownership depending on the type of named beneficiary account. For all life insurance proceeds, I would recommend getting them in a centralized bank account in order to pay off any outstanding debts you may have. There will be a good period of time writing letters and filling out forms to change titling of accounts for all of your finances.
  • Notify the credit card companies - It goes without saying that you should continue to pay your bills as normal for the first three months including any estimated tax payments that may have to be made. You should notify the credit card companies to ensure that no person is using credit cards from the deceased individual. If you had the same type of card in your name and your spouse's name, you should be sure to get the card put in your name only. If your spouse used the card to pay bills automatically, you should be certain to make those bill changes.
  • Maintain a healthy cash reserve of at least one year of monthly expenses - At emotional times like these, it is very difficult to say what direction your life will go over the next year. By having at least one year in an FDIC insured cash reserve, you can put yourself in a good position to have the flexibility to weigh out all of your options. Should you sell the house? Should you stay in the same area or move? Will you go back to work or stay at home? What additional support or help might you need on a day to day basis? What investment strategy makes the most sense with your retirement money?

When my father passed away, it took my mother months to really uncover all of the different financial things my father had done with the family finances. Take your time with your overall financial decisions, and make sure you revisit what your financial goals are before you make a move one way or another. Being a widow can be a very difficult time, and having a good financial advisor around you can potentially help you smooth out the right path to take for your financial future.

Written by:

Ted Jenkin, CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®

Co-CEO and Founder oXYGen Financial, Inc

Ted Jenkin is one of the foremost knowledgeable professionals in giving financial advice and Smart Money Moves to the X and Y Generation.

Securities and Investment Advisory Services offered through NFP Advisor Services, LLC (NFPAS), Member FINRA/SIPC. Oxygen Financial is not affiliated with NFPAS. NFPAS does not provide tax or legal advice. This site is published for residents of the United States only. Registered Representatives and Investment Advisor Representatives of NFP Advisor Services, LLC (NFPAS) may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed. Not all products and services referenced on this site are available in every state and through every representative or advisor listed. For additional information, please contact NFPAS Compliance Department at 512-697-6000. PLEASE NOTE: The information being provided is strictly as a courtesy. When you link to any of the web sites provided here, you are leaving this web site. NFP Advisor Services, LLC makes no representation as to the completeness or accuracy of information provided at these web sites. Nor is NFP Advisor Services, LLC liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, web sites, information and programs made available through this web site. When you access one of these web sites, you are leaving our web site and assume total responsibility and risk for your use of the web sites you are linking to.

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Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice. https://Bit.ly/KF-Disclosures

This site is published for residents of the United States only. Registered Representatives of Kestra IS and Investment Advisor Representatives of Kestra AS may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed. Not all products and services referenced on this site are available in every state and through every representative or advisor listed. For additional information, please contact Kestra IS Compliance Department at 844-553-7872.

PLEASE NOTE: The information being provided is strictly as a courtesy. When you link to any of the web sites provided here, you are leaving this web site. Kestra IS and Kestra AS makes no representation as to the completeness or accuracy of information provided at these web sites. Nor is Kestra IS and Kestra AS liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, web sites, information and programs made available through this web site. When you access one of these web sites, you are leaving our web site and assume total responsibility and risk for your use of the web sites you are linking to.