We read about long-married couples who die in quick succession, but what happens to most couples is that one is left behind for many years. What happens to the surviving spouse?
Given the sadness of the topic, it’s no surprise that most people don’t prepare for the loss of a spouse, reports a study from Merrill Lynch and Age Wave that was covered in USA Today’s recent article, “Before the death of a spouse, here's how to prepare a financial plan for living alone.” Slightly more than half of the widows surveyed, reported that they did not plan for how the surviving spouse would manage and more than three-quarters of the married retirees questioned said that frankly, they would not be prepared for the financial change when their spouse died. That’s a real problem, given that the death of a spouse leaves most households with less than half of their prior income.
Here’s what couples should do to better prepare for the loss of a spouse.
There are about 20 million widows in the U.S., and 1.4 million new widows annually, according to the study. Nevertheless, most married couples don’t like discussing or planning for death. Nonetheless, it’s best to address this difficult subject head-on because of the potentially dire consequences.
If you need assistance, speak with a qualified elder law attorney. A new widow also should put together a comprehensive financial evaluation and plan with an analysis of potential cash flow issues that emerge after the death of a spouse.
An experienced and knowledgeable elder law attorney can conduct a thorough inventory of the available financial resources and help integrate Social Security, Medicare, Medicaid, veteran’s benefits, and other programs to maximize the benefits you will receive. An experienced estate planning attorney can also then determine, if any asset protection/wealth preservation strategies are necessary to qualify for and preserve government benefits. For instance, an income-only trust to make sure an individual qualifies for Medicaid may be needed to qualify for Medicaid.
Ask yourself if you have enough life insurance because it’s important to get the necessary amount of insurance, in case of an unexpected or premature death. Calculate how much to purchase using any number of methods—human life, financial needs, and capital retention.
A widow needs planning, not products. This is where estate planning attorneys and elder law attorneys can maintain the focus on planning and help protect widows financially.
The key to planning properly for the death of a spouse, is to determine exactly what the available financial resources are and figure out the financial needs.
Without a plan, it’s less likely that you’ll be able to maintain your independence and lifestyle.
Reference: USA Today (September 26, 2018) “Before the death of a spouse, here's how to prepare a financial plan for living alone”