Moving Forward Financially After Divorce or Death of a Spouse

The loss and grief following the sudden death of a spouse or after a divorce can be overwhelming. The death often leaves the surviving partner facing the daunting task of moving forward alone. Likewise, ending a marriage by divorce doesn’t terminate the relationship entirely. Decisions about finances, asset division, and potential parenting responsibilities must continue to be managed by the separating spouses for some time.

Managing the significant financial implications of these life changes can be particularly challenging. However, taking charge of your finances can be empowering with the right approach and proper guidance. Ask for help, whether it’s from a family member, close friend, or your advisor, and consider these initial steps.

When dealing with the death of a spouse or partner:

• Gather all relevant documents, such as will/trust, life insurance policies, birth certificate, marriage certificate, death certificate (order at least 12 from the funeral home as you will need them to claim benefits), your spouse’s Social Security card, investment account statements, and retirement/pension plan statements. We have created an essential checklist for the recently widowed to help with these tasks.
• Talk with your estate planning attorney to review your spouse’s will/trust and address beneficiary distributions.
• Contact financial institutions to change the names on the accounts, as needed.
• Notify the Social Security Administration of your spouse’s passing to claim the death benefit and see if your spousal/survivor benefits need to be adjusted.
• Contact all three credit bureaus requesting copies of your spouse’s credit reports to ensure you know all existing debts.
• File outstanding medical care benefits claims with your spouse’s health insurance provider.

Did you know?

• While it’s true more than half of all women over age 75 are widowed, the U.S. Census also reports that the average age of widowhood for women is only 59 years old – an age when many couples are still working and drawing an income from an employer.¹
• Among those 75 years or older who had ever married, 58% of women and 28% of men had experienced the death of a spouse in their lifetime, making this stage of life particularly difficult for older adults.²

When dealing with divorce:

• Organize your financial records; make copies of documents and store them in a secure place only you can access them.
• Start putting money away for legal and other professional fees. You also need to cover your day-to-day living expenses, remembering that the divorce process can take much longer and cost more than anticipated.
• Open new accounts, preferably at institutions where you don’t have your joint accounts.
• Get a copy of your credit report to monitor your credit and ensure joint debt is not being accrued on existing accounts.
• Update your will, healthcare directives, and beneficiary information. You likely don’t want your soon-to-be ex to make medical decisions on your behalf or inherit your assets. You can revise your estate planning documents when your divorce is finalized.

Did you know?

• While the divorce rate of first marriages in the U.S. is 43%, the divorce rate for second marriages is 67% and 73% for third marriages.²
• Although significantly lower when compared with 55 to 64-year-olds, high rates of divorce persist for those 65 to 74 years at 39%, which is still higher than for the general adult population. The rate for adults ages 75 or older is lower at 24%.²

The importance of a good team

Following a life-changing event, having the right team to guide you safely through the financial challenges is crucial to help you manage the complex and interconnected legal, investment, and accounting requirements. The time invested will reassure you that you understand your finances and can help you make good decisions as your life changes.

For nearly 40 years, Mercer Advisors has been helping clients amplify and simplify their financial lives and futures. For more information, contact your advisor. If you are not a client but would like to learn more, contact us.