How to help widows navigate a new reality

When a client or employee loses a spouse, they lose a lot more than a mate or partner; they may also lose a sense of themselves and their hopes for the future. If they’re not careful, they could also lose a lot of money.

When you envision a widow, you likely picture an older woman. That’s because a woman is twice as likely as a man to become a widow.¹ If her husband handled the finances and paid the bills, there’s a good chance she’ll need help avoiding potential pitfalls and figuring out next steps.

Financial professionals and plan sponsors can help guide a widow through the many financial decisions that need to be made, especially when emotions are raw. When the time is right, consider the following.

First steps

Grief can make it difficult for a widow to focus on important matters that need addressing early on. Providing a checklist of next steps for a grieving spouse can ease some anxiety and help ensure they don’t miss important details.

Examples of first steps might include:

• Requesting 10-12 copies of a spouse’s death certificate (life insurance companies, banks and other institutions may require a copy)
• Finding a will, trust and other estate information, and determining the executor or trustee
• Notifying agencies and appropriate organizations including the Social Security Administration, the spouse’s HR Department, insurance company, banks or credit unions, social media companies and others
• Updating bills and utilities
• Changing, closing or monitoring a deceased spouse’s email, social media, prescriptions, subscriptions, etc.
• Determining debts and assets
• Gathering important documents²

The Consumer Financial Protection Bureau offers a helpful checklist that can be shared with a grieving spouse.

Understand the impact of grief

Emotions can range from deep anguish to anger to feeling numb when a spouse dies, no matter how expected or unexpected it is. Perhaps one of the best decisions a widow can make during such moments is to refrain from making major decisions — at least when it comes to financial matters.

It’s important to consider how intense emotions can cloud a person’s judgment and lead to regret. Most major financial decisions about retirement strategies or investments don’t need to be made right away. Allow some breathing room and provide your professional guidance about more timely needs like paying bills, ensuring cash flow or settling an estate. You may also want to ask whether they have someone to accompany them when meeting with an estate attorney. If not, consider offering to join them. 

It’s prudent to also provide a broad overview of assets and a suggested timeline for addressing longer-term financial needs. Over time, explore more in-depth ways to protect assets and help them grow. And, of course, there will come a time to ensure their own estate planning needs are met, too.

Help widows avoid financial pitfalls

As time goes on, you’ll be able to guide your widowed client about bigger financial decisions and strategies, but it’s also important to help your client consider possible missteps.

For example, a widowed client may decide to marry again at some point, and it will be helpful to understand potential financial implications. Do they realize that if they remarry before age 60, they may not be able to claim their deceased spouse’s Social Security benefits while married to someone else? Waiting to remarry until after age 60 could allow them to still receive those benefits.³

While relational matters can be a sensitive subject, it’s important to encourage widowed clients to discuss financial arrangements before committing to a long-term relationship. For example, will they each have separate bank accounts? Do new estate plans need to be drawn up? Who pays for what, and what sources of income does each person have?

If you meet with your widowed client regularly, you’ll hopefully be able to learn about any new relationships and can tactfully address such matters proactively. A financial agreement and transparency between your client and a potential new spouse is critical and can help their relationship—and, potentially, relationships with their children and beneficiaries.

Demonstrate empathy

Your first job as a financial professional or plan sponsor is to demonstrate care and empathy as you help a widowed client navigate the financial complexities of settling an estate and evaluating retirement plans. 

The reality is, you may have emotions of your own over the death of a client’s spouse. Sharing your memories and caring thoughts may help your widowed client heal, as well as yourself. Never dismiss the power of compassion.

SOURCES
¹ Consumer Financial Protection Bureau, Financial challenges faced by recently widowed older adults, May 26, 2022
² Consumer Financial Protection Bureau, Help For Surviving Spouses, May 2022
³ Social Security Administration, Planning for Your Survivors, accessed Aug 3, 2023