Getting Back on My Feet

A newly widowed woman must deal with emotional and financial issues all at once. You should make some money moves right away — getting insurance payouts, for example, and employer-related benefits. But some decisions can definitely wait.

By Kate Ashford

Eight years ago, Kathleen Fox’s* husband, Wayne, was killed at 49 when his small plane crashed. He owned an electrical-construction company and was flying along a power line to see what needed to be done for a job. “We think the plane stalled,” Kathleen says. “It was very sudden. An out-of-the-blue ordinary day that turned into one that wasn’t.”

Wayne didn’t have a will. So Kathleen, 51 at the time, was left to make the estate decisions on her own — a tricky business since their blended family included three of his kids and two of hers. “I was trying to do what he’d have wanted,” says Kathleen, a writer and editor in Rapid City, South Dakota. “It’s ironic that we have to make all these decisions when we’re so emotional and vulnerable.”
There was a feeling of, ‘Oh my God, he died, and they’re going to pay me all this money. And if I take it that means it’s OK that he died.
What needs to be done now
Some decisions can wait. But you should make the following moves soon after your husband’s death, in order to help keep your financial life and retirement planning on course:

  • Call Social Security. You may be eligible for a one-time death payment of $255. But you may also qualify for survivors’ benefits starting in retirement or sooner. It depends on your age and financial situation.

    If you and your husband have children under 16, you may be able start collecting survivors’ benefits now. If the children are older, you could start collecting reduced benefits as early as age 60. (It’s based on your husband’s earnings record.) Sort out the details by contacting your local Social Security office.

    Tip: Try calling Social Security on a Thursday or Friday for a shorter wait.

  • Contact your husband’s employers — past and present. Was your husband employed when he died? If so, ask his company’s human resources department how you can receive money from his pension and 401(k) plans, his last paycheck, unpaid bonuses, deferred compensation, stock options, vacation or sick leave, and any life insurance policies.

    You can also ask for a copy of the employee benefits handbook. That should explain if you’re entitled to other benefits. If your husband had a pension plan or 401(k) plan with any previous jobs, you’ll want to call those employers as well.

  • Update your estate. Wills, trusts, and powers of attorneys often name a spouse as beneficiary, so you might need to name new beneficiaries. The same holds true for retirement accounts, investment accounts, and life insurance policies. If your husband was selected as your primary beneficiary, the contingent beneficiary, if you selected one, now becomes the primary beneficiary. Talk to a lawyer about how to make adjustments.

  • Find out if your health coverage will be affected. Were you receiving medical coverage through your husband’s policy? If so, talk to his employer’s benefits department. With companies cutting back on benefits in general, it’s less likely that you’ll be able to continue getting health insurance. But it doesn’t hurt to ask.

    You may have to get coverage from your own employer or shop for a new policy on the open market.

  • Watch out for vultures. “About a month after Wayne died, I started getting letters from financial investment people,” Kathleen says. “They were all very low key, but it really was awful to me. I’m sure what these people do is read the obits and put it on their calendar.” If you need short-term advice, consult someone you know, like a relationship manager or financial advisor where you bank.
Other considerations
After your husband’s death, you may feel you need to take care of everything right away. Resist the urge. For example, you can likely put off paying off your mortgage, or making significant investment decisions. And if your life insurance payout sits in a low-interest money market account for a few months, that’s not the worst thing. Two other points:

  • Take all the money that’s coming to you. “What?” you ask. “Why wouldn’t I?” You’d be surprised. Kathleen, for instance, had trouble accepting her husband’s life insurance money and worker’s compensation payout. “There was a feeling of, ‘Oh my God, he died, and they’re going to pay me all this money. And if I take it, that means it’s OK that he died,’ ” she says. “There was a real sense of ickiness about it for me.” It’s normal to feel conflicted about taking the money. But remember: The income is intended to help support you for the rest of your life.

  • Consult a financial advisor on what to do with it. If your husband had a sizeable life insurance policy, you might suddenly find yourself in possession of an extra $1 million or $2 million — or more.
But bear in mind “It’s not as much money as it seems,” says Rich Kahler, author of Conscious Finance. “That’s the present value of your spouse’s earning capacity for the next 10 to 20 years. You’re just getting it all up front.” If you draw down the money at the rate of 3 to 4 percent a year, every $1 million will only provide $30,000 to $40,000 of yearly income. When you’re ready, consult a financial advisor on how best to invest it. Ask friends, family, or colleagues to recommend someone.

Tip: If your husband’s life insurance policy was purchased privately — not through his employer — you’ll have to contact the agent or company. Don’t expect them to call you.
Links to helpful resources
Financial documents you may need
  • Your spouse’s will (the original document, not a photocopy)
  • A prenuptial or postnuptial agreement
  • Your spouse’s Social Security number and any Social Security records
  • Your marriage certificate
  • Military discharge papers
  • Insurance policies
  • Spouse’s birth certificate
  • Deeds to your home(s)
  • Car titles and registrations, with loan information or lease agreements

Key Points:

  • Check for potential payouts or income from Social Security, the human resources department where your husband worked, and insurance companies.
  • Update your estate matters.
  • Check into health care coverage.
  • Take all the money that’s coming to you, without embarrassment.
Kate Ashford writes about personal finance and health. Her work has appeared in Money, More, and Good Housekeeping, among other publications.

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