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  • Writer's pictureMark Fonville, CFP®

How to Prepare for the Death of a Spouse

Updated: Apr 15


How to prepare for the death of a spouse

Embarking on the golden years of retirement should be a time of laughter, adventure, and making the most of each precious moment.


However, let's not shy away from the reality that life's journey includes preparing for tough times – even the unimaginable. As you get closer to retirement, it becomes more important to address the difficult topic of preparing for the potential death of a spouse.


In addition to the money aspects, the emotional and practical challenges of a loss can be overwhelming.


To help you get financially organized, we've put together this free kit of handy guides, checklists, and workflows that touch on many aspects of getting organized in retirement. So be sure to download them here.


In this article, we will explore strategies to help retirees navigate the challenges of this sensitive subject. You’ll find guidance on both emotional preparation and practical steps to ease the burden during such a challenging time.


By taking steps now, retirees can better prepare for the inevitable and honor the memory of their spouse.


Key documents to prepare for the death of a spouse

Organizing Documents for the Death of a Spouse

Few notes are as crucial as the organization of documents. Picture it as the conductor orchestrating a harmonious finale to a lifetime of shared melodies. Among the most vital aspects of this preparation is the compilation and sorting of documents:


  • The will and testament

  • Power of attorney

  • Trust, titles, and property deeds

  • Advance directives

  • Funeral instructions

  • Insurance policies

  • Detailed account information


These documents can help form the foundation of a plan. They can serve as a guide for the legal, financial, and emotional aspects that follow the loss of a spouse.


In the digital age, our lives rely on passwords, security questions, and two-factor authentication (2FA) codes. It’s essential to control access to accounts and share them at the right times. Planning for the death of a spouse includes protecting digital assets and also ensuring that trusted family members or advisors can access the info. 


Here is a step-by-step approach to securing and organizing info:


Step 1: Choose a Secure Platform

Select a reliable and secure platform for storing information. Consider encrypted password managers or dedicated secure vaults. Popular options include LastPass, 1Password, and Bitwarden, to help ensure that your data remains encrypted.


Step 2: Compile and Organize Information

Gather information, such as passwords and any other details. Then organize to make it easy for your trusted contacts to find information when needed. Be thorough but mindful of the sensitivity of the data you're storing.


Step 3: Set Up Secure Access

Implement an access protocol to safeguard the information. Create a strong master password and consider authentication measures, such as biometrics or hardware keys, to add an extra layer of security.


Step 4: Document Emergency Procedures

Clearly outline emergency procedures and contact information for people who will have access. Include instructions on accessing the information, what it contains, and any actions they may need to take in case of an emergency.


Step 5: Share Responsibly

Select trustworthy family members to share access with, ensuring they understand the importance of keeping it safe. Let them know the purpose of their access and the role it plays in supporting your wishes and obligations.



A wealth advisor can play a role as well. They can assist families with organizing and managing financial documents. Their expertise goes beyond investment strategies and covers a wide approach to financial planning. Advisors can organize, safeguard, and optimize the use of essential documents. 


Contact one of our advisors today to get a free retirement assessment that covers many aspects of your financial life, including getting organized.


Reviewing and Updating Financial Plans

Having a financial plan in retirement can help you navigate retirement with confidence. This plan serves as a roadmap, guiding you through the challenges of post-career life. It can include budgeting, investment strategies, risk management, and estate planning. 


A well-crafted financial plan ensures that retirees can maintain their desired lifestyle and provides a safety net for expenses and potential healthcare needs.


Reviews and updates of a financial plan are essential. This helps your plan remain relevant, effective, and aligned with your goals. Life is dynamic, and events such as marriage, the birth of a child, or the death of a spouse can impact your finances. Regular reviews help you to adapt your financial strategies.


Periodic reviews can help you find new opportunities, adjust investments, and improve tax strategies. You can reassess risk tolerance and investments to align with current financial goals.


Wealth advisors can customize financial plans for retirees, recognizing challenges that arise during this pivotal stage of life. As people approach retirement or are already retired, a wealth advisor tailors their financial plans, such as preparing for the death of a spouse. 


 

Pro Tip: For individuals with over $1 million in savings and investments, we can help create a plan for you, help you get organized, and help provide the financial security you need. Contact us today for a free assessment.

 

Think of revisiting financial documents as giving your finances a spa day – refreshing, rejuvenating, and essential for overall well-being. It’s paramount to maintain an up-to-date financial strategy. Here are some documents to revisit regularly:


  • Insurance coverage is a pillar of financial security, providing a safety net for unforeseen events. Regular reviews ensure that coverage aligns with your needs, accounting for changes in income and lifestyle. Adjusting coverage can help protect you and your loved ones.

  • Revisiting and updating beneficiaries on accounts and policies is crucial. Life events such as marriages, divorces, births, or deaths may require changes to beneficiaries. Ensuring that these designations reflect your intentions helps prevent potential conflicts or oversights.

  • Estate planning documents, including wills, trusts, and power of attorney, should also undergo reviews. Life changes may impact the effectiveness of these documents. Regular reviews with legal professionals can lead to adjustments, ensuring that the estate plan meets one's wishes and aligns with current laws and regulations.


Revisiting these documents can lead you to a well-rounded financial plan. Regular updates not only safeguard you and your family but can also provide peace of mind. A proactive approach to document maintenance can ensure that your financial strategy remains strong.


Top 5 considerations for shifting from dual to single income

Moving to a Single Income

Moving from a dual to a single income can be a big financial hit. Here are some aspects to consider:


1. Budgeting and Lifestyle Adjustments:

The first step is to reassess and adjust your household budget. Find areas where you can cut back. Evaluate discretionary spending, explore alternatives, and prioritize essentials. 


2. Emergency Fund and Financial Cushion:

Build up your emergency fund for a single-income scenario. Having a financial cushion helps cover unexpected expenses. It can also provide peace of mind during times of financial uncertainty.


3. Retirement Planning:

Assess the impact on your retirement savings, especially if the spouse who lost income contributed to retirement accounts. Consider adjusting contributions and optimizing your retirement portfolio in a way that aligns with your goals.



4. Understanding Pension and Social Security Entitlements:

If one spouse is entitled to a portion of a pension or social security in the event of death, it's crucial to understand the arrangement. Review the pension and social security plans to determine the entitlement and the duration of the benefits. Check out this free flowchart that helps find if you’re eligible for social security benefits as a surviving spouse.


5. Life Insurance:

In a single-income scenario, life insurance might become more important. It can provide financial support for the surviving spouse and any dependents in the event of death. Review existing life insurance policies and consider whether adjustments make sense.


Moving from a dual-income to a single-income scenario requires better financial management. By addressing these points, you can navigate with greater financial resilience and confidence.


How to Optimize Investment Portfolios

Managing investment portfolios and retirement income is a process that involves many factors. There can be a lot that goes into planning this, and without a game plan, it can be overwhelming. Here are strategies to consider:


Optimizing Investment Portfolios


1. Diversification:

Spread your investments across different assets to lower risk. Diversification can help balance your portfolio's performance during various market conditions.


2. Asset Allocation:

Adjust your asset allocation based on your risk tolerance, time horizon, and financial goals. As you approach retirement, consider a more conservative allocation to protect capital.


3. Income-Generating Investments:

Consider the potential implications of including income-generating assets, such as dividend-paying stocks and ETFs, to create reliable streams of income during retirement.


4. Stay Informed:

Keep yourself informed about market trends, regulations, and geopolitical events that may impact your investments. Consider professional advice for a well-informed investment strategy.



Managing Retirement Income


1. Create a Withdrawal Strategy:

Develop a withdrawal strategy that balances income needs with preserving the longevity of your savings. The 4% rule is a common guideline for retirement withdrawals.


2. Emergency Fund:

Maintain an emergency fund to cover unexpected expenses. This can prevent the need to sell investments at inopportune times.


3. Social Security Optimization:

Maximize your Social Security benefits by understanding the optimal timing for claiming. Delaying benefits can result in higher monthly payouts.


4. Tax Planning:

Be mindful of taxes when withdrawing from retirement accounts. Plan withdrawals to minimize tax liability.


5. Consult with Financial Advisors:

Seek advice from advisors who specialize in retirement planning. They can provide guidance based on your financial situation and goals. Whether you’re dealing with the death of a spouse or not, speak with a professional from Covenant today and get a free retirement assessment to help plan and prepare.  


Optimizing investments and retirement income requires a dynamic approach. Regular assessments, adjustments, and staying informed are key elements of a successful retirement strategy.


Optimizing investment portfolios vs Managing retirement income

Importance of Long-Term Care Planning

Long-term care planning can help with health-related expenses, such as nursing home care or in-home assistance. These services can be costly and may not be fully covered by health insurance or government programs.


By planning for long-term care needs, you can look into long-term care insurance options, and establish a financial safety net. This not only safeguards your assets but can also reduce the financial burden on yourself and your loved ones.


Conclusion

Exploring financial planning unveils a crucial lesson – adaptability is the cornerstone of financial resilience. From the organization of documents to moving through life stages, the ability to adapt to change emerges as a common thread.


The world of finance is dynamic and comes with many challenges and opportunities. Whether optimizing investment portfolios, managing retirement income, or looking into long-term care, the lesson echoes: continual learning and flexibility are the keys to financial well-being.


We hope that you’ve found this article valuable when it comes to learning about “How to Prepare for the Death of a Spouse.” If you’re interested in reading more, please subscribe below to get alerted of new articles as we write them.


 

Mark Fonville, CFP

Author: Mark Fonville, CFP®


Mark is a fiduciary, fee-only financial advisor at Covenant Wealth Advisors specializing in helping individuals aged 50 plus plan, invest, and enjoy retirement without the stress of money.


Forbes nominated Mark as a Best-In-State Wealth Advisor* and he has been featured in the New York Times, Barron's, Forbes, and Kiplinger Magazine.



 

Disclosure: Covenant Wealth Advisors is a registered investment advisor with offices in Richmond VA, Reston VA and Williamsburg, VA. Registration of an investment advisor does not imply a certain level of skill or training. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views and opinions expressed in this content are as of the date of the posting, are subject to change based on market and other conditions. This content contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this content should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax, or legal advice. If you would like accounting, tax, or legal advice, you should consult with your own accountants or attorneys regarding your individual circumstances and needs. No advice may be rendered by Covenant Wealth Advisors unless a client service agreement is in place. Hypothetical examples are fictitious and are only used to illustrate a specific point of view. Diversification does not guarantee against risk of loss. While this guide attempts to be as comprehensive as possible but no article can cover all aspects of retirement planning. Be sure to consult an advisor for comprehensive advice.

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