Suddenly Single
Dealing With the Financial Issues of Death and Divorce The death of a spouse or a divorce are traumatic experiences that can shake the very foundations of your life. In the midst of dealing with the grief and pain of the loss of a loved one, there are financial matters that must be taken care of.
Record keeping is one of the most important, and includes keeping a handle on your bills, balances owed, investments, and bank statements.
Keep payments and files up to date.
The computer can be an invaluable tool and a time-saver, but your financial affairs can also be taken care of manually. Don't allow things to get behind, even if you must recruit a family member or hire a financial advisor to help you get through the initial weeks and months after your loss.
As soon as possible, gather up all the documents you can find that are related to your financial affairs and review them. Are there life insurance companies that need to be notified? Does your spouse's employer need to be notified for retirement plan or group insurance plan purposes? Do brokerage companies or lenders need to be notified to change the name on your accounts?
Documents Needed
One of the most pressing matters is to itemize your bills and your assets, so you have a clear idea of your financial obligations and whether you have the cash or other assets to pay them. If cash is low, you may have to decide which bills you can pay and which you have to delay. Contact your creditors, explaining your situation, and be sure to always pay mortgages, health and property insurance, and utilities first.
Another important issue is your insurance needs. If you have just lost your spouse and you have no dependent children, you may be carrying too much life insurance. If, through death or divorce, you are now the sole supporter of a child, you may have too little life insurance.
You may also want to take out a disability policy on yourself if you don't already have one, so that if you were unable to work you'd have money to support yourself and your child. If your spouse was the beneficiary on any of your insurance policies, you'll need to designate a new beneficiary.
Some financial issues can usually wait for a few months, such as reviewing and making changes to your investments. These important decisions should not be made immediately after a death or divorce, if at all possible. Once you're ready, you'll want to create a net worth statement (a list of your assets and liabilities), and a budget, showing your expected income and expenses, and then assess your investment strategies. You may want to consult a financial professional (accountant or financial planner).
You will also find yourself faced with lifestyle decisions such as whether to move to a smaller house or apartment, move to a different town, return to school, or travel. Having a firm grip on your financial affairs will make all of these decisions and the transition to single life a little less painful.
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Record keeping is one of the most important, and includes keeping a handle on your bills, balances owed, investments, and bank statements.
Keep payments and files up to date.
The computer can be an invaluable tool and a time-saver, but your financial affairs can also be taken care of manually. Don't allow things to get behind, even if you must recruit a family member or hire a financial advisor to help you get through the initial weeks and months after your loss.
As soon as possible, gather up all the documents you can find that are related to your financial affairs and review them. Are there life insurance companies that need to be notified? Does your spouse's employer need to be notified for retirement plan or group insurance plan purposes? Do brokerage companies or lenders need to be notified to change the name on your accounts?
Documents Needed
- Will
- Social Security card
- Insurance policies
- Loan and lease documents
- Birth certificate
- Stock certificates
- Brokerage account statements
- Bank statements
- Mortgage documents
- Deeds
- Retirement plan documents
- Employment contracts
- Partnership agreements
- Divorce agreements
- Funeral arrangements
- Death certificate
- Tax returns (4 years)
- Safe deposit box information
One of the most pressing matters is to itemize your bills and your assets, so you have a clear idea of your financial obligations and whether you have the cash or other assets to pay them. If cash is low, you may have to decide which bills you can pay and which you have to delay. Contact your creditors, explaining your situation, and be sure to always pay mortgages, health and property insurance, and utilities first.
Another important issue is your insurance needs. If you have just lost your spouse and you have no dependent children, you may be carrying too much life insurance. If, through death or divorce, you are now the sole supporter of a child, you may have too little life insurance.
You may also want to take out a disability policy on yourself if you don't already have one, so that if you were unable to work you'd have money to support yourself and your child. If your spouse was the beneficiary on any of your insurance policies, you'll need to designate a new beneficiary.
Some financial issues can usually wait for a few months, such as reviewing and making changes to your investments. These important decisions should not be made immediately after a death or divorce, if at all possible. Once you're ready, you'll want to create a net worth statement (a list of your assets and liabilities), and a budget, showing your expected income and expenses, and then assess your investment strategies. You may want to consult a financial professional (accountant or financial planner).
You will also find yourself faced with lifestyle decisions such as whether to move to a smaller house or apartment, move to a different town, return to school, or travel. Having a firm grip on your financial affairs will make all of these decisions and the transition to single life a little less painful.
More Money Articles
