Preventing Financial Mistakes of the Recently Widowed

The recently widowed are often faced with many financial decisions, decisions that are made harder by the grief and despair that follow the death of a loved one. There are many financial pitfalls that widows typically succumb to, but these pitfall are easily avoidable. Four financial pitfalls the recently widowed can easily avoid are below:

1. Within a month or two of a spouse’s death, the surviving spouse must look into employer provided health insurance, continue paying bills, and collect on any life insurance proceeds. Almost all other tasks can and should wait until the surviving spouse has had time to evaluate his or her options and make well educated decisions.
2. Surviving spouses should not rush to pay off a mortgage because remaining in the home may not be the best option. The added expenses of repairs, yard care, and maintenance, coupled with the mortgage and real estate tax, can make continuing to live in the home an unnecessary financial hardship.
3. Recently widowed individual should understand his or her vulnerability and be wary of giving money or inheritance advances to family members. If an advance is given, it should be in writing to ensure there is no confusion later on.
4. Surviving spouses, especially widows, should not think twice about altering his or her investments if the decedent’s concentrated position in the investments is not the most financially beneficial.

See Ron Lieber, For the Recently Widowed, Some Big Financial Pitfalls to Avoid, The New York Times, Sep. 2, 2011.

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law)for bringing this article to my attention.