The loss of a spouse causes a huge upheaval to a senior’s life. Whether expected or not, the surviving spouse is often left with immense feelings of helplessness as they face an unfamiliar life without their closest companion. Unfortunately, the loss of a spouse means that many tricky financial decisions must be made. However, one’s ability to tackle these difficult decisions is often compromised by emotion. Here’s how you can help ease the burden on your loved ones.
Start with Funeral Planning
If your loved one is tasked with making funeral arrangements, there are many financial factors that must be considered. For example, they have to decide where to hold the service and whether to be cremated. Since your loved one will be in a state of grief, they may be inclined to pick the easiest options available. Bereavement is one of the most difficult periods in a person’s life, and they will likely need assistance making tough decisions. This is especially true when their choices involve an emotional task, such as making funeral arrangements.
You can help them save a lot of money by shopping around for them. Call different funeral homes and ask for prices; keep this pricing checklist on hand when asking companies for the costs of various services. Keep in mind that the average funeral costs between $7,000 and $9,000. Help them identify and access any funds or insurance policies that have been set aside to cover these expenses.
File Claims for Life Insurance
Beneficiaries do not have to claim life insurance right away, but your loved one might need the money as soon as possible to help them pay the bills without their spouse around. You can help them file a claim with their spouse’s life insurance carrier once your loved one has obtained their insurance policy. In addition to the policy document, they will need to have a copy of the death certificate and a claim form available. Help your loved one prepare these documents since gathering all of the information required can be quite overwhelming.
Apply for Relevant Benefits
Your loved one may need assistance determining the right time to claim any survivor benefits to maximize their financial security in retirement. According to The Balance, they will only receive about 70 percent of their spouse’s benefits if they take them at the age of 60 instead of waiting for age 67. However, taking the benefits early also means that they will collect money for a longer period of time. Make sure you go over the Social Security benefit rules with your loved one beforehand to help them make an informed decision.
Handle Existing Debt
Taking care of debt and maintaining credit health is another important step following the death of a spouse. Your loved one should request their spouse’s credit report for a list of their open accounts. Help them send a copy of the death certificate to their spouse’s credit card companies and cancel all accounts that are solely under their name; the surviving spouse is not required to pay off this debt. However, your loved one will have to continue making payments on any accounts that they shared with their spouse. If you live in a community property state, your loved one will almost certainly have to settle debt incurred by their spouse, even if they were unaware of its existence.
If the spouse took care of the bills, your loved one might have to work a bit to improve their own credit score. Good credit is important for seniors who may want to buy a new house, get a premium credit card, or enter an assisted living facility in the future. Credit repair services can help raise your loved one’s credit by having negative reporting changed or removed.
Set Them Up with a New Budget
MarketWatch recommends developing a budget after a couple of months so that your loved one has a chance to see how much money they need to live off of. Tracking expenses and income sources will reveal areas that need to be trimmed to help them maintain their desired lifestyle. For example, they may want to cancel services, subscriptions, or memberships that were primarily used by their spouse.
Budgeting can also help them refrain from spending large sums of money received from insurance on investments or gifts for children. It is also wise to seek the help of a competent financial advisor, who can help with finding investments and meeting their short- and long term financial goals.
Importantly, avoid pressuring your loved one to make any financial decisions they don’t feel entirely comfortable with. Topics like investing and whether to sell the family home should wait. Remember that it will take them some time to adjust to their new life and budget following this loss. It can be helpful for them to maintain their old, familiar spending habits and bill payments for the time being as they cope with their grief.
~ By Sara Bailey, Contributing Writer
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