New widows take stock of finances

Feb. 12, 2007. I'll remember that date forever. It was just before Valentine's Day. That's when my husband — my best friend, my soul mate, my Tom — died.

With my husband gone, I felt as if half of me were cut off and thrown away. I was heartbroken. I cried … couldn't sleep … lost my appetite … was forgetful … felt detached and numb. In short, I was in the first stage of widowhood: grief.

Pawel Gaul | E+ | Getty Images

Early grief is a vulnerable time for a new widow. Women have told me they thought they were going crazy after their husband's death. The emotional stress accompanying a spouse's passing and the associated bereavement impacts a woman's cognitive abilities. Her attention span may be short, memory can be weak, and decision-making is downright difficult. A widow's physical health may also deteriorate, especially if she doesn't feel like eating and isn't sleeping well or exercising.

Yet during this very rough time, a new widow often faces important financial, insurance and legal issues. Without her partner at her side, these tasks often seem overwhelming.

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During the early grieving process, a widow needs to be with family and friends — those who care for and support her emotionally. That should be her most important priority as she focuses on "taking care of me." A new widow needs to be heard and understood by those who listen to her story through her tears. But some financial concerns will also need addressing. Here are a few steps you can take to make the process a little easier:

Create a financially safe place. If you are a recent widow, focus on "financial triage" activities during early grief. Concentrate on the highest-priority financial issues, and deal with less important matters later.

Create a money-flow plan — including sources of money coming in and where you spend that money — in order to help maintain your current lifestyle. Make sure bills are paid. File for and collect death and other eligible benefits from your husband's prior employer.

Be certain your health and other insurance coverage continues. List your various accounts and where they're located. Check what's in the safe-deposit box.

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You may start the estate-settlement process by locating the legal documents and notifying agencies that need to know about your husband's death. Doing a financial reality check will help you ward off the frightening "bag lady syndrome." This is common with new widows, who wonder if they're going to be OK financially. During this unsettling transition time, you want to feel safe and secure.

Stay in a "decision-free zone." This will protect yourself from the pressure of making a big, irrevocable decision you might regret later. The decision-free zone (a term coined by the Sudden Money Institute) should continue for at least a few months. For some widows, this period may last up to a year.

For example, intense memories of your husband in the home you shared for years may provoke you to consider moving away from those familiar walls. But if you run away to a new location, you may end up grieving from a "loss of place" in addition to the death of your husband.

This isn't the time to invest life insurance benefits or other new money in something you don't understand, either. Rather, deposit that cash in a money market-type account. (Many insurance companies offer this option. Ask the agent.) Keep insurance money easily accessible for immediate and near-term expenses before making longer-term investments with that cash.

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If you've been widowed recently, practice saying, "Thanks. That's an interesting idea. I'll think about it."

Be prepared to recite this line if you're pressured by financial salespeople or relatives and friends who don't understand that you need time to concentrate on yourself in early widowhood. Write these words on a piece of paper and keep it by your phone as well.

Again, turn to family and friends. Relatives and trusted friends can help out with some of the paperwork. They can assist by organizing information to be shared with other professionals later, such as income tax-related statements for the tax preparer, estate-settlement items for the attorney, and monthly bank or brokerage statements for the financial advisor. These papers can be put in different-colored folders to help distinguish each file's focus.