Widowed or Divorced

Get financial protection when you need it the most

When you are dealing with the death of a spouse or a divorce, taking care of your finances may be the last thing on your mind. The stress of these transitions can often leave you feeling overwhelmed and out of control.

But protecting your interests and organizing your finances can make things a lot easier for you in the future.

Financial planning when you’re widowed
Financial planning when getting divorced

Organizing your finances after the death of a spouse

Losing a spouse is difficult enough, but when you add to it the pressure of having to settle the estate and organize finances, it can often feel like too much to handle. Fortunately, there are steps you can take to make it a little more manageable.

Notify others

When your spouse dies, your first step should be to contact anyone who is close to you and your spouse and anyone who may help you with funeral preparations. Next, you should contact the following to find out how you can file for benefits:

Your attorney and any other financial professionals
Life insurance companies and government agencies
Your spouse's employer

Get advice

Getting expert advice when you need it is essential:

An attorney can help you go over your spouse's will and start estate settlement procedures.
Your funeral director can help you obtain copies of the death certificate and applications for Social Security and veterans benefits.

A Financial Advisor can assist you with the claims process and can help you organize your finances.

Locate important documents and financial records

Before you can begin to settle your spouse's estate or apply for insurance proceeds or government benefits, you will need to locate important documents and financial records such as:

Birth certificates
Marriage certificates
Life insurance policies
Financial account statements

Evaluate short-term income and expenses

When your spouse dies, you may have some immediate expenses to take care of. Even if you are expecting money from an insurance or estate settlement, you may lack the funds to pay for those expenses right away. If that is the case, don't panic—you have several options:

If your spouse had a life insurance policy that named you as the beneficiary, you may be able to get the life insurance proceeds within a few days after you file.
Try to negotiate with creditors to allow you to postpone payment of certain debts.
As a last resort, use credit cards or even cash advances against credit cards, but be aware that the interest rates on cash advances can be above 25%.

Avoid hasty decisions

The death of a spouse is an emotional time that can trigger emotional decisions. During this time, it is important to avoid making hasty decisions. Follow these tips to help keep your finances secure:

Don't think about moving from your current home until you can make a decision based on reason rather than emotion.
Don't spend money impulsively.
Don't cave in to pressure to sell or give away your spouse's possessions.
Don't give or loan money to others without reviewing your finances first.

You may also want to learn more about managing an inheritance.

Protecting your assets in the event of divorce

If protecting your assets means that you want to keep all of your money, property, and possessions out of your soon-to-be ex-spouse's hands, you are probably out of luck. Any assets acquired during marriage are considered marital property and must be divided according to state law:

If you live in a community property state (ie, California, Texas, or one of eight other states), you and your spouse must split any marital assets equally.
In all other states, assets must be divided equitably (fairly) rather than equally.

Your best protection is to make sure that your interests are represented. Hire an experienced attorney who will help you negotiate a fair settlement.

Save time and money by doing your homework

Before meeting with a professional divorce attorney, compile as much of the following information as you can:

Each spouse's date of birth and social security number
Names and dates of birth for the children, if you have any
Date and place of marriage and length of residency in present state
Existence of prenuptial agreement
Information about any prior marriages, children, etc
Date of separation and grounds for divorce
Current occupation and income; name and address of employer for each spouse
Education, degrees, and training of each spouse
Extent of employee benefits for each spouse
Separate and joint assets and liabilities of each spouse
Life (and other) insurance for each spouse
Financial records
Family business records
Information on collections, artwork, and antiques

If you're uncertain about some of these areas, you can obtain the necessary information through your spouse's financial affidavit and/or the discovery process, both of which are mandated by the court.

You might also want to think about the following questions before your meeting:

If you have children, what are your wishes regarding custody, visitation, and child support?
Whose health insurance plan should cover the children?
Do you earn enough money to adequately support yourself, or should alimony be considered?
Which assets do you really want, and which are you willing to let your spouse keep?
How do you feel about the family home?
Will you have enough money to pay the outstanding debt on whatever assets you keep?

In addition to an attorney, you may want to seek counseling to help you clarify your wishes, express yourself more clearly, and deal with any child-related issues. Such counseling is typically covered by health insurance.

Some dos and don'ts when divorcing

Do prepare a budget and a financial plan to sustain you until your divorce is final.
Do review monthly bank and financial statements and make copies for your attorney.
Do review all tax returns that have been filed jointly or separately by your spouse.
Do make sure all taxes have been paid to date.
Do review the contents of any safe-deposit boxes.
Do get emotional support for yourself—talk to friends, join a support group, or see a therapist.
Don't make large purchases or create additional debt that might later cause financial hardship.
Don't quit your job.
Don't move out of the house before consulting your attorney.
Don't transfer or give away assets that are owned jointly.
Don't sign a blank financial statement or any other document without reviewing it with your attorney.

Print these lists as a PDF

Divorce is never easy, but with the right preparation you can be better prepared for your financial future.

Now, read about managing finances when you are marrying again and blending families.