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Achieving Financial Well-Being After the Loss of a Spouse

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Paul Bechly, CFA, CFP
First Vice President
Morgan Stanley Wealth Management

Losing a spouse may be one of the most traumatic events you ever face in your lifetime. This devastating loss drains your emotions and makes it hard to focus on simple daily tasks, let alone financial matters. But, financial obligations are a fact of life—there are bills to be paid and decisions to be made. Taking an active role in understanding the key financial issues you face can help you begin to implement a plan that will bring more confidence and clarity to your life.

Your Journey to Financial Well-Being

Your new financial reality can be intimidating, especially if your spouse was responsible for controlling your family finances. Suddenly, you are faced with an unfamiliar set of worries: Do I have enough income to maintain my lifestyle? Will I be able to stay in my house or will I need to sell it? What do I do about my spouse’s retirement account? Can I collect on my spouse’s Social Security benefits?

These questions can be overwhelming and confusing. Rather than tackling them all at once, start with these four important steps to begin your journey to financial well-being:

  1. Gather all your financial documents.

This may include bank and brokerage statements, retirement statements, credit card statements, loan information, property titles, business agreements, tax returns and life insurance policies. If you have any joint accounts, begin retitling them, but consider keeping a joint checking account open for at least one year in the event you receive checks made payable to your spouse.

  1. Prioritize your financial obligations.

Pay the most important obligations first. These typically include mortgage and car payments, taxes, utility bills and insurance premiums. If you’re not sure how much cash you have available, consider making minimum payments on credit cards until you have a budget in place.

  1. Honor a ‘decision-free zone’.

While some financial decisions require immediate attention, others can wait. Consider committing to a one-year ‘decision-free zone’ where you avoid making any major, irrevocable decisions that involve large investments, gifts to family members or charities, and your home. Instead, focus on paying the bills and running your household as you usually do. If you receive a large sum of money from an insurance policy, deposit it in the bank. This will give you the time you need to adjust to your new life and make more objective financial decisions.

  1. Create a plan and stick to it.

Determine your spending needs by tracking your household income and expenses for a few months. This will help you understand how much you will need to achieve your definition of financial security.

Regaining your financial balance after the loss of a spouse isn’t easy, but you don’t have to do it alone. It may be a good idea to surround yourself with a support team you can trust. An experienced team of advisors, including an accountant, estate attorney and a Financial Advisor, can help you make informed decisions and provide critical support during this difficult time.

Disclosures

Paul Bechly is a Financial Advisor / Family Wealth Advisor in Greenville, Delaware at Morgan Stanley Smith Barney LLC (“Morgan Stanley”). He can be reached by email at [email protected] or by telephone at 302-573-4001.  His website is https://fa.morganstanley.com/paul.bechly/

This material has been prepared for educational purposes only. It does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it.

Morgan Stanley Smith Barney LLC (“Morgan Stanley”), its affiliates and Morgan Stanley Financial Advisors and Private Wealth Advisors do not provide tax or legal advice. Clients should consult their tax advisor for matters involving taxation and tax planning and their attorney for matters involving trust and estate planning and other legal matters.

Paul Bechly may only transact business, follow-up with individualized responses, or render personalized investment advice for compensation, in states where he is registered or excluded or exempted from registration, https://fa.morganstanley.com/paul.bechly/

© 2021 Morgan Stanley Smith Barney LLC. Member SIPC. CRC# 3052861 04/2021

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