How to avoid financial chaos when your partner dies and the family finances are a mystery to you

Capital Asset Management, Financial Chaos, Widow

Dealing with life after losing a husband can be confusing and painful. Emotions run high and low. Following soon afterwards comes a tsunami of financial problems to knock you even further backwards. Few widows are prepared for this second wave and can drown in the complexity of the paperwork.

Nobody prepared you for this. It’s all new and unexpected. The very person you would naturally turn to for help isn’t there. This blog aims to help and explain how to plan ahead.

Society has come a long way on gender equality. A few generations ago, the norm was that men went to work and provided for the family, while women stayed at home, raised the children, and looked after the home. Now, while not universal, it is certainly more normal for a ‘working family’ to mean both partners going out to work and earning an income. The concept of women being able to pursue a career and raise a family is now the norm.

Yet there is no room for complacency. There is still a long way to go. Stories about the gender pay gap and women hitting glass ceilings in reaching the very highest positions of responsibility and power are still depressingly familiar.

Who wears the financial trousers?

There are other more hidden ways in which old patriarchal attitudes still hold sway. For example, one study in the US found that just one in seven women in heterosexual couples (14%) were involved in making financial decisions in their household. The idea that money is the man’s business is an attitude with which our grandparents would have been familiar.

However, this disempowerment of women from household finances can have serious negative consequences. The study carried out by Merrill Lynch consisted of a survey of the financial effects of widowhood. It found that for two-thirds of widows, suddenly becoming the sole financial decision maker in their household was the top challenge they faced following their partner’s death.

As we mark International Widow’s Day on Sunday, 23 June, it is high time to reassess attitudes to domestic finances. With male partners three times more likely to die first and widows surviving their partners by an average of 14 years, it makes no sense for women to become involved in financial management for the first time when they are bereaved.

It only adds to the shock, confusion and difficulty that follows losing a husband or partner. Apart from everything else, it does not reflect positively on how far attitudes to gender equality have come.

See the following four recommendations for all women and couples to follow to help avoid the financial chaos that can follow the death of a male partner.

1. Make money-talk part of your relationship

This isn’t something you should only consider with the prospect of the female partner one day being widowed. The first step to changing attitudes to how men and women share responsibility for financial matters is breaking down barriers to communication.

Many couples find money difficult to talk about. It can be a touchy, emotional subject, because partners may have different opinions on spending priorities, or whether they should be trying to save for the future or enjoying what they have. Just like any potential points of disagreement in a relationship, burying your head in the sand will not make it go away.

Whatever the barriers, finding ways to talk about money in a constructive way can help to avoid conflict, improve your relationship, and actually make your money go further than it otherwise would. Money is one of the key things couples fight about – by not talking, disagreements and resentments build up until they boil over. Instead, if you communicate effectively and get to the point where both of you are in full agreement, the chances are you will make better financial decisions for your whole family. This blog will help you to break down those barriers and talk about the evitable.

2. Get involved in the family finances. Now.

While talking about money in general terms is a good idea for a harmonious and successful relationship, one specific benefit is that it ensures continuity when death strikes one partner. For women especially, talking about money is empowerment, before and after a partner’s death.

When talk progresses to decision making, it puts you on an equal footing, gives you control over your own destiny, and helps to alleviate any worries you may have about what would happen when your partner dies.

There are certain practical things every partner should know before their loved one dies.

  • Where all your bank accounts and NS&I savings are held;
  • The name and contact details of the family financial adviser;
  • All the online account numbers and passwords;
  • Where the wills and insurance policies are stored;
  • Who you need to inform, and when;
  • The pension and state benefits to which you are entitled.

Not having access to money that is yours, or not even knowing where it is, can leave widows and their children facing entirely unnecessary hardship.

When a partner does die, knowledge of financial affairs becomes crucial for widows. Do you know how to locate important documentation that will be needed for probate purposes? Do you know how to go about transferring accounts into your own name? If bills are in your partners’ name, how will you keep paying them and make sure you don’t have your gas or electricity cut off? It is issues like these that make holding joint accounts in both names a good idea.

3. Plan 

Talking is good, getting involved is better, and planning is best.

Put together a file or folder, an excel spreadsheet, or an online secure cloud account – whatever works for you. Document and/or scan every important document, such as –

  • Life insurance;
  • Property insurance;
  • Motor insurance;
  • Utility bills;
  • Bank statements;
  • Credit cards;
  • Loans and mortgages;
  • House title deeds;
  • Passports;
  • Wills;
  • Driving licences;
  • Mobile phone contracts;
  • Internet and cable details.

The list goes on. Aim to have as many of these in joint names as you can. Leave nothing undone. If there are passwords (do you, right now, know how to unlock the smartphone of your partner?) then store them securely and let the immediate family know where to find them.

If you are a client of Capital, you can store all your important documents on your secure private cloud, FileSafe.

4. Press the pause button

If you do find yourself in a position where you have been widowed and you don’t feel in complete financial control, it is important not to panic. While there are some financial matters that are urgent – ensuring you have access to money to get through the day-to-day, for example, and paying bills on time. Your priority is yourself, your children, and dealing with the grief of your loss.

Grief can take a lot out of you and can take a long time to come to terms with. What you don’t need during this difficult time is the stress of trying to pick up the pieces of financial management from scratch. If you are already an account holder and decision maker, this becomes a reduced factor.

At some point, there will be important financial decisions to make. The loss of a partner’s income may force you to reassess your lifestyle and long-term plans. You may see the benefits in downsizing your home, or you may change your plans on retirement. The best advice is, take your time. There is no rush, and decisions made when you are still dealing with your grief may not be the best in the long term.

What next?

Dr Kubler-Ross wrote about the five stages of grief. Whilst this has been questioned over the years, widows may go through some or all of the stages, and it is a good resource to better understand your feelings.

Widows shouldn’t be afraid to take some advice. Even when you are the main financial decision-maker, some choices are not easy. Turning to a professional adviser who can help you navigate your way through your long-term options following the death of a partner can be even more empowering. Second opinions and having a sounding board for your ideas can be valuable.

If you have suffered a recent bereavement and need financial help, or want to become financially empowered, contact the team at Capital.

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