LFG Marketing | June 2019
Something you probably don’t know: June 23rd is International Widows Day on the United Nations’ calendar. First observed in 2010, the day was established to raise global awareness of the hardships facing widows following the death of their spouses.
These hardships vary by country and culture. In some so-called “traditional” societies, a woman whose husband has died may be denied an inheritance, evicted from her home, or socially ostracized. In the United States, widows – both men and women – may not encounter the threats to their well-being, but the challenges – emotional and material – can still be significant.
Yet while widowhood is an almost certain event in a marriage, couples often neglect to prepare for it.
Widowhood: Some Statistics
The US Census provides some eye-opening insight into widowhood in the United States. (Note: In US data,
“widowhood” is a gender-neutral term for an individual whose marriage has ended because of the death of a spouse.)
- It occurs sooner than you might think. In 2016, 24 percent of Americans over the age of 65 had experienced the death of a spouse. Another often-quoted statistic culled from census reports: the median age that widowhood occurs is 59.4.
- In the United States, widowhood is predominantly a woman’s experience. American women have longer life expectancies and, until recently, have tended to marry men slightly older than themselves. This combination explains why an overwhelming majority of widows – about 85 percent – are women. Women are also more likely to remain widowed as opposed to remarrying.
- Widowhood often has a negative impact on the finances of a surviving spouse. The Social Security Administration reports that the rate of poverty among elderly widows is three to four times higher than their married counterparts of the same age. Even widows that aren’t impoverished often face major financial adjustments, such as decreased income, loss of health insurance, or the need to relocate.
Not Fun, but Fundamental
Preparing for widowhood is not a “fun” financial task. But most of the preparation is fundamental financial management that ought to be done anyway.
Identify, update and exchange financial information. It’s surprising how uninformed spouses can be about each other’s financial lives. Even in marriages that consciously attempt to integrate finances (joint checking accounts, both names on the mortgage), a lot of financial activity is specific to one spouse; a credit card, a retirement account, an ownership interest in a business, an investment account for dabbling in the stock market, a car with only one name on the title. Both parties should know about the pieces of their financial lives that are separate.
Assemble a comprehensive list of all financial assets, along with statements, passwords, ownership arrangements, and designated beneficiaries, and know where it will be kept. (Secure on-line digital vaults can be a great place to store this information – as long as someone remembers, or can retrieve, the password.)
Plan for succession. One of the advantages of marriage is the division of labor; one person shops, the other does the dishes. And quite often, one person manages the money. If the money-managing spouses dies, can the widow easily assume those duties, or will he/she need help? For older widows, an adult child often serves as a financial assistant, which may be fine. But deciding on a trusted financial professional to serve as a backup is usually a prudent option. Whatever you decide, the key is having someone in place to help manage your affairs.
Review your life insurance. Following the mainstream financial wisdom of their time, many couples bought term life insurance several decades ago, hoping that when the term expired, they would no longer need or want life insurance. But times change. Today, some of these couples recognize that a life insurance benefit would make widowhood much more manageable. If your widowhood scenarios don’t have life insurance, it’s worth looking at how you might get some. If you have life insurance, be sure you can keep it in force until death.
Please, please, please…prepare a will. So many people, even those with lots of assets, never get around to executing a will and trust. We get it; paying for a legal document regarding your future death isn’t fun. But dying without a will makes it harder for individually-owned assets to be transferred or liquidated.
After the death of a spouse, go slow on major decisions. An April 19, 2019, Wall Street Journal article, “Surviving Solo,” notes that the decisions that come in the aftermath of the death of a spouse can be daunting. This is particularly true of real estate because of the “emotional attachments, and in some cases, the needs of the couple’s children.”
To mitigate against impulsive behavior that may be triggered by the passing of a spouse, financial professionals often recommend that widows refrain from making major financial decisions for anywhere from six months to three years. Besides decisions about real estate, this caution applies to other things, like the receipt of life insurance proceeds, and adjustments to inheritance distributions, especially if the widow remarries.
Lifetime Financial Growth, LLC is an Agency of The Guardian Life Insurance Company of America® (Guardian), New York, NY. Securities products and advisory services offered through Park Avenue Securities LLC (PAS), member FINRA, SIPC. OSJ: 244 Blvd of the Allies, Pittsburgh, PA 15222 (412) 391-6700. PAS is an indirect, wholly-owned subsidiary of Guardian. This firm is not an affiliate or subsidiary of PAS. 2019-80670 EXP 05/2021