Taking Care of Your Finances After Losing a Loved One

By DeAndrea Douglas
older woman in white shirt looking at receipts in frustration

For most of us, finances will be the furthest thing from our minds when we lose someone we love. However, when you lose a spouse, a parent, or anyone else you have financial ties with, you will have to consider how to handle the financial part of that loss at some point. It’s more than just covering the cost of getting their body to it’s final resting place.

I know this is morbid, but losing people you love is part of living. As uncomfortable as it is to consider our mortality, having a starting place on how to muddle through life while you’re grieving before you get there will help make a difficult time in your life a little easier. These are some things you can do to take care of your finances after losing a loved one, as soon as you feel able to do so.

Take a Breather

First, take a moment. Or two. Maybe even three. Dealing with finances immediately after a loss can feel overwhelming. It’s okay to pause and breathe. You don’t have to sort everything out in a day. The bills can wait a moment; your well-being can’t.

Gather the Essentials

Once you feel up to the task, it is a good idea to start gathering all of the vital documents that you think you’ll need to keep your finances in good shape. Things like wills, bank statements, and insurance policies as well as any information relating to debts owed. That way, you can get organized and feel a little better about the situation. This is another reason I recommend sharing every bit of your financial life with your spouse. Same team, same dream. That way if the worst happens the surviving spouse already has a lay of the land and can make a new plan.

It is also a good idea to keep a record of any account you have so anyone left to pick up the pieces when you’re gone has an easier time. You might want to talk to a professional before adding anyone to your accounts. I hear a horror story of a parent putting their married child on their retirement account and losing half of the account when the child got divorced. Yikes.

Apply for an Estate Tax ID Number

If you find yourself needing to act on behalf of your loved one’s estate, you’ll likely need to apply for an estate tax ID number. This isn’t just another bureaucratic hoop to jump through; it’s actually pretty important. It allows you to handle taxes, open an estate bank account, and do all the adult things that you probably wish you didn’t have to, like consolidating accounts, setting up new ones, settling debts, etc. Think of it as getting the keys to a very complicated car.

Notify the Necessary Parties

This isn’t about telling friends and family. You’ll need to notify banks, credit card companies, and government bodies like the Social Security Administration. If you’ve changed your name at any point in your life this process is similar to that. It’s a simple and repetitive process, but once it’s done it makes navigating the new phase of life you’re in a lot easier.

Set a New Budget

Your financial situation might look different now that your loved one has passed. You’ll need to set up a new budget to account for your your altered financial position. Prioritize your immediate needs, consider any new expenses or changes in income, and remember, budgets are more guidelines than gospel. It’s there to give you guardrails so you’re not over spending and have a better idea of where your money is going.

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Ask for Help

If the thought of tackling this alone is about as appealing as a root canal, don’t be shy about asking for help. A financial advisor can be as comforting as finding an extra fry at the bottom of the bag. They can help you make sense of estate issues, taxes, and planning your financial future without your loved one. Just make sure you’re talking to a fiduciary advisor as they legally have to prioritize your best interest in the advice they give you.

Allow for Adjustment

Finally, give yourself time to adjust. Managing finances after a loss is a process, not a one-time event. There will be good days, bad days, and “I can’t even” days. That’s all part of it. Be patient with yourself and know that it’s okay to not have all the answers right away.

When you are going through a tough time, the last thing you need is for financial issues to make it even harder.These tips will undoubtedly make things a little easier. The best time to prepare for the end of your loved one’s life is right now. You can talk to your parents and in laws to make sure someone know where to find their accounts and make sure you get things organized for yourself too. The reality is that none of us know when our time is up so preparing for it now will make things easier for those you leave behind.