Even though women are becoming more involved in their family’s financial affairs and sometimes may even run them, widowhood remains a significant risk factor. The death of a spouse is traumatic enough without having to deal with the aftermath of a possible transition into poverty due to poorly managed financial affairs. A recent American survey (Mathew Greenwald & Associates) of women whose partners have died, showed that half of them lost 50% of their income following their spouses’ death.
Statistically, women also live longer than men, so it is even more important to be prepared for a life without your spouse and look at widowhood as ‘when’, rather than ‘if’. Particularly when y the statistics are against you – 1 in 5 women living in poverty are 60 and older, 46% of ‘poor’ women aged 60 and over are widows. . To avoid being one of these sad statistics, take the necessary steps to remain financially secure in widowhood.
Get involved with the family finances
Involve yourself with the financial decision-making and ensure you are included in meetings with the financial adviser. You should know the location of all important documents, safe combinations, keys for safety-deposit boxes, flash drives, computer logins and passwords.
Look at your life insurances
If you have insufficient capital to support your lifestyle then you must ensure there is life cover in place to replace some of the income after the death of your partner. Consult your financial advisor on the best ways to approach life insurance in your particular circumstances.
Look at your investments and look at consolidating
Meet with your financial advisor and discuss your portfolio of investments with them to establish the amount of income you might expect from your investments in the event of your spouse’s death.
If your spouse has many individually titled investments, it can lead to a complex and time-consuming mess for the survivor to sort out. Avoid any financial headaches by building a solid investment strategy and consolidate your accounts. Every investment requires its own process when the owner passes. The investments that don’t require any strategic planning can be easily consolidated, resulting in less time and paperwork.
Relook at your marital regime
Your marital regime plays a crucial role in how your assets are dealt with in the event of your spouse’s death. . Here are two examples:
- By being married in Community of Property, the demise (if, for example, he was ill prior to death) of your husband may drive a once profitable business into insolvency. Being married in Community of Property means that you too will become insolvent and the assets that you thought were yours alone could be attached by creditors.
- If you were married with an antenuptial contract subject to the accrual system, you may believe that assets in your name are yours. However, your assets that were bought during your marriage may need to be sold to provide enough liquidity to pay for, say an ex-spouse’s maintenance claim.
As illustrated above, the impact could be significant. Understand the implications to ensure you plan accordingly.
Understanding your benefits
It is important to establish and know after the death of your spouse what you will receive and when you will receive it.. You also need to be aware of the benefits you will be entitled to, as it might affect your decisions before your spouse’s death. Ensure that beneficiary nominations are up to date, especially if yours is your spouse’s second marriage. Where possible and appropriate, ensure that as many beneficiary nominations are attached to as many assets as possible. This will ensure that these assets are passed directly to you and are not ‘frozen’ during the winding up of the estate. This also helps to reduce executors’ fees.
Work with an experienced financial advisor
Consult with an independent financial adviser who has the financial IQ to deal with high-level planning inevitably adding value across estate, investment, retirement and tax planning. If you don’t have a financial adviser or you usually just let your husband deal with your financial affairs, then it’s time to appoint one or get to know the one you have. You need an adviser you can trust in times of need.
The bottom line?
Make sure you are ready for whatever eventuality – no matter how morbid and foreboding it seems at the time. It will likely give your partner peace of mind knowing that when they are no longer around you will still be looked after and financially stable.