There are an estimated 11.2 million widowed individuals across the nation, according to the U.S. census, most of them women. Those who are affluent often initially face one of two financial challenges: having too little cash or too much.
The most common issue in having too little cash is lack of immediate access. Perhaps most of the family assets are in real estate, business ownership and/or retirement plans. These assets can be sold, but the process often takes time or involves additional costs, such as paying taxes and penalties on retirement plan distributions.
If most of the family assets are in the late husband's name, the bank or custodian may restrict access until the estate is settled. When a widow has financial obligations, it's incredibly frustrating to have the wealth to meet needs but not enough access to enough cash in the short-term to do so.
More from Smart Investing:
Not rich enough to need a will? Think again
Advisors turn to alternative investments for clients
How to hack your HSA for other financial needs
Believe it or not, having too much cash can also be a problem. After the estate is settled, it's possible a widow will have more cash than is needed for short-term expenses. In addition to managing the feeling that your money isn't working for you by just sitting around in cash, this is also the time you have to start dealing with people who start magically appearing in your life.
Your husband's stockbroker wants you to buy his new product, family members show up with hands extended and charities suddenly take a greater interest. Intentions aside, the deluge in unsolicited advice and attention can be overwhelming and confusing.
Here are the four steps you should take in the first year as a widow to manage cash well.
1. Determine how much cash is available. As soon as possible, create a list that shows the cash accounts in your name, your late husband's name and jointly held. These accounts include checking, savings and money market. In addition, write down the locations and balances and how you can access each account, such as by check book or debit card. Finally, record the regular amount of cash flowing into each account. If this proves too difficult practically or emotionally, engage a friend or family member to help you.