Recently, a New York Times article on widowhood cited a U.S. Census Bureau statistic that stopped me in my tracks. Roughly 34% of women over the age of 65 were widows in 2016, compared to only 12% of men. That’s right, if you’re female and over the age of 65, about one-third of you and your close female friends are likely to have lost a spouse. (NYT, 4/11/19, “You’re a Widow, Now What?”)
I am turning 60 this year and so are many of my girlfriends. The age of 65 used to feel so far off, but it’s not anymore. It’s hard to think about one-third of us losing our partners in the coming decade. But the reality is that some of us will. As a financial advisor, I’ve had the honor of working with many widows over the last decade. What I see most of the time is a sad story that just keeps repeating itself.
A woman loses her spouse, and at the most vulnerable time of her life, she is thrust into the role of chief financial officer for her household, with perhaps no prior training or preparation. Still grieving, she may be besieged by family, friends and outside sales people who will try to convince her to make financial decisions that she might not be emotionally ready or able to make. This leaves her feeling scared, overwhelmed, daunted by the task of sorting out her husband’s estate, and bewildered by whether or not she can afford the lifestyle that she and her husband once had together.
Nothing can truly prepare any of us for losing a beloved spouse, but there are things that women can do now to ensure that when and if the time comes, she will be able to make the transition to widowhood much easier. I’d like to outline five of the most important ones here.
- If you and your husband are working with an advisor, make sure you are comfortable working with that advisor. If you haven’t been attending meetings with the advisor, now is the time to start. Go to meetings, ask questions, understand what assets you have, and how they are being managed. Make sure that your advisor respects your part in the relationship, and is someone that you feel comfortable communicating with. Don’t be afraid to speak up and tell your spouse if you don’t like your advisor. It’s better to find a new advisor together now, and have your spouse help to find that person, than to have to do it alone once your spouse is gone.
- Know what you have, and where it’s held. You and your spouse should have a readily accessible list of your assets at all times. The list should include account numbers, where the account is held (name of bank or brokerage), approximate value and login credentials for accessing that account online. If you’re working with an advisor, she should be updating this inventory for you at least once a year.
- Maintain a list of login credentials for accessing financial assets that you and your spouse own. Keep the list in a safe place that both you and your partner can easily access and update whenever you change a password. Better yet, both you and your partner could use a password management app on your respective phones. Be sure to share your phone password with your spouse, and vice versa. That way, if your spouse dies, you can get into their phone and use the password management app.
- Set up an estate plan. If you are working with an advisor, a good one will tell you that this is the first step to becoming properly prepared for a spouse’s death. Having a will is not the same as having an estate plan. An estate plan includes a will, but also includes powers of attorney for healthcare and property, and may include living or testamentary (at death) trusts. A good estate-planning attorney will work with you to prepare these documents, and will follow up and help you re-title assets and re-name beneficiaries on your financial assets. A good estate plan can help you avoid probate, which can be lengthy and expensive, and may tie up assets that you might need to live on. A will does not avoid the probate process, but properly established trusts can.
- Consolidate, consolidate, consolidate. When you take an inventory of your assets, do you notice that you have assets all over the place and with more than two custodians (i.e., Fidelity, Schwab)? Do you have more than two to three bank accounts? Do you own stock in physical stock certificate form? If you answered yes to any of the above, now is the time to start consolidating your assets. This will not only make tracking your investments and how they are performing much easier, but will also make the process of re-titling assets and managing things when one spouse dies much simpler. There is no reason to hold stock in certificate form anymore, so get those stock certificates to a broker who will keep them at a financial institution. Going through this process after a spouse dies can be a lengthy and complicated and taking care of it now can help simplify things later. Ask your advisor for help with consolidating assets, and if you aren’t working with one, now might be the time to consider doing so.
Set a goal for yourself to work on some of these steps this next year, and set a timeline for achieving each step. You and your spouse will be better for it, and you’ll probably sleep better at night knowing that you’ve made things easier for each other going into your senior years.
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