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September 10, 2024 at 03:26 PM
What You Need to Know
- The surviving spouse often faces some immediate financial challenges, like paying for the funeral and maintaining insurance coverage.
- When they are ready, you can help with estate and lifestyle planning.
- A widow or widower is likely to need compassion, support and care to best manage their financial situation.
One of advisors’ most important and meaningful responsibilities is helping clients navigate life’s greatest challenges, including the loss of a significant other. A widow or widower frequently needs compassion, support and care from their advisor to best manage their financial situation during this extremely difficult time.
This is often the case, especially with younger clients. Ideally, advisors will have regularly reviewed clients’ estate planning documents (both physical and digital), beneficiaries, and asset inventory. This preparation can make a significant difference if an unexpected death occurs.
Here are several financial challenges that young, widowed clients may encounter, and how advisors can assist them.
Navigating Funeral Costs
The first financial decision that clients are likely to face is managing their spouse’s funeral expenses. Funerals can be costly, and clients may need help navigating these expenses and understanding their cash needs.
Beyond finances, they may need assistance with planning the funeral.
Ensuring Continuity of Insurance Coverage
Some clients may be ready to address their finances immediately, while others may need more time to ease into the difficult situation at hand. One pressing short-term consideration is insurance coverage.
Life insurance policies ought to be reviewed once a death certificate is obtained, especially if the surviving spouse is expecting a payout. For young clients not yet eligible for Medicare, securing new health coverage for themselves and other dependents should be a priority.
Covering Child Care and Education Costs
Another pressing consideration is ensuring that child care and schooling costs are covered. This is particularly urgent for young widows and widowers with children who require daycare, school tuition or related expenses.
Often, advisors are faced with a situation where the spouse who oversaw the majority of finances is the one who passes away, leaving the surviving partner largely in the dark about their financial situation. In such cases, guidance can be crucial. Advisors can focus on education, teaching clients how to best manage the accounts, investments and policies that their spouse has left behind.
