The Financial Repercussions of Losing A Spouse

The loss of a spouse is a tragic event, and we know that it can send you reeling, especially if the loss was unexpected.  Unfortunately, the grief following this type of loss can have far-reaching effects that extend all the way into your financial situation.  Oftentimes, finances (including insurance policies) are handled by one spouse or the other, and if the spouse who passes was the one “holding the purse strings” (overseeing the majority of the financial information and decisions) it can leave their husband/wife confused and unsure of what to do next.

These are some common mistakes made by those in the wake of their loss, and how to avoid them should you find yourself in this dilemma:

Impulsive Decisions And Big Changes:  It can be easy to fall into the trap of making sudden decisions without thinking them through when you are struggling with the loss of someone you love.  Impulse can lead you to make major financial decisions such as paying off a mortgage, buying a new car, or going on a once-in-a-lifetime vacation with the payoff of a life insurance policy.  While these things are all wonderful, in and of themselves, they might not be the best thing for your finances.  Take a lengthy and in-depth look at your financial situation and consider sitting down to discuss it with your financial and/or insurance advisor before you choose to make any major changes or purchases using insurance money or savings.

Excessive Spending.  Spending too much is a common scenario when one loses a spouse.  This doesn’t always mean buying things for yourself, but can also apply to handing out money to your children (or other family members), friends, or charities in large amounts.  Spending in excess can put you in financial distress quickly, and could leave you struggling to pay your bills.  It’s ok to be generous, but do it with a financial plan in place.  In this same way, plan out your own purchases if they are on a grand scale.  Taking a big vacation could be a great way to emotionally heal after the loss of someone you care about, but plan for it from a monetary standpoint to avoid it causing issues with your budget.

Changing Things Up.  Changes of any kind in the face of grief might not be the best idea (at least not until you have time for your head to clear in the aftermath) but making changes to your financial plan and advising is very unwise.  Widows commonly switch financial advisors within a year after the loss of their husbands, and while this might be ok sometimes, in most situations you are better to stick with whomever put together your financial plan and is prepared to help you navigate the unknown waters of managing your assets.

If you are currently dealing with the loss of a spouse, Carroll Marshall is prepared to help you with your insurance coverage and advising needs.  We can assist you in determining what (if any) money you are entitled to from a spouse’s life insurance policies, and we can make sure you are covered by your own health, auto, home, or life insurance policies.  Give us a call or stop by our Winter Haven office to see what we can do for you.