Personal financial planning: assisting the newly widow(ER)ED.

• Author: Schulman, Michael David

The loss of a loved one, especially a spouse, triggers many emotions: sadness over the loss, fear of the future, concern for the surviving spouse's well-being, and anxiety over finances. This article discusses ways to aid clients who have suffered the loss of a spouse or other close loved one. (The article does not address premortem financial planning; hopefully, that has been taken care of.)

FuneralPlan.com reports that a common result of the loss of a spouse is physical exhaustion, which could result either from insomnia or depression. According to Don Harold Lawrence of Shackelford Funeral Directors in Tennessee, common mental reactions include confusion, depression, auditory and visual hallucinations, and doom-and-gloom negative thinking. These reactions, both physical and emotional, can be a serious hindrance to a surviving spouse's ability to make intelligent, thoughtful financial decisions.

Important Papers

A key first step is to collect important papers and documents. If the deceased spouse died testate (i.e., with a will), it is critical to locate the will. Common places to look for a will include a safe deposit box in a bank, a safe or desk drawer in the house, or an attorney's office.

It is strongly recommended that a will not be kept in a safe deposit box. The reason for that is, once the owner of the safe deposit box dies, the bank locks it. If there are no other authorized users, the bank will not open the box without a court order. Therefore, it is better to keep the will among personal papers in the house, with a trusted family member, or with the attorney who drew it up.

In addition to the will, other trust documents for which the deceased was trustee or a beneficiary need to be located. Just as with a will, trust documents will have instructions on how assets should be handled on the spouse's death. Proper planning requires that these documents be available as soon as practical. If the surviving spouse is not the trustee, the new trustee needs to be contacted.

Collect day-to-day financial documents such as savings and checking account statements, credit card bills, utility bills, and loan payment books for mortgages and car loans.

If the deceased spouse was a participant in a retirement plan, look for the plan documents and, more important, the beneficiary designations.

Other documents to look for are business agreements, especially if they detail payments to a surviving spouse.

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Managing Cashflow

In many cases, the surviving spouse lacks knowledge of the family's finances. A good place to start with the spouse is to analyze the sources and amounts of recurring income, as well as any onetime income from the deceased spouse's estate. Presumably, the surviving spouse...