Managing grief with financial preparedness and open communication

The loss of a spouse or family member can be overwhelming. Grief is not a one-size-fits-all emotion, and it doesn’t look the same for everyone. While you struggle to cope with the emotional fallout, the last thing you want to worry about is managing your finances. If you relied on that person’s income, being prepared financially can allow you and your loved ones to focus on the process of grieving without the added stress of making major financial decisions.

Plan your legacy

You can help make sure your loved ones have less to worry about financially after you are gone, by being prepared. Think about it — we plan dinners, parties, and vacations. So why wouldn’t we plan for our legacy? It’s hard to think about, but it’s important to take care of the people we love. As you begin to formulate a plan, make sure you have enough life insurance to keep your loved ones cared for, and think about who you trust and who matters to you. Appointing a power of attorney and creating a health care directive ensures you receive the care you want if you become incapacitated, as well as lifts this burden off your loved ones. Having a written will or other estate planning documents in place can make the grieving process slightly less overwhelming for your family in the event of your passing — and ensures your beneficiaries quickly and correctly receive the legacy you wish to leave them.

Opening the lines of communication

Talking about grief and preparing for end-of-life issues can be difficult, but not having them could make the future even more difficult. When everyone is happy and healthy, taking the time to talk to your loved ones about creating a trust fund or writing a will can alleviate a significant amount of stress if hardships do arrive. Whether it’s your spouse or your parents, schedule a time to sit down and listen to their concerns and desires.

Protect your loved ones

It’s human nature to protect your family, and planning ahead can also ease the emotional burden during a difficult time. By designating a beneficiary on your life insurance or annuity, you help ensure your loved ones remain financially protected after you pass away. This will bypass the costs and time involved with the probate process. Beneficiary designations generally go into effect immediately following your death and they override your will. This means if you marry and divorce, then marry again, and forget to change the beneficiary, your new spouse won’t receive your assets. When life changes, be sure to check in with your policies to ensure your wishes are carried out.

Outdated estate plans can create unintended problems. Many older plans were designed to minimize estate taxes by placing a large portion of assets into a family trust when the first spouse dies. Because the federal estate tax exemption has increased significantly in recent years, these formula-based plans may now overfund the trust leaving little or no assets directly to the surviving spouse. While the spouse often has some access to trust funds, it can limit flexibility and control. Reviewing and updating your estate plan ensures your loved ones are protected under current tax laws.

To avoid these scenarios, review your beneficiary designations and estate plans on an annual basis and make sure they’re up to date, so your family is still protected during a time of loss.

Resources for grieving family

Grief affects everyone differently, including children. How children process grief depends significantly on their age, general coping style, and level of understanding. Anger, fear, sadness, and withdrawal from social activities are just some of the typical reactions that children may experience; giving them the space to grieve is a necessary step in moving forward. Group therapy and mental health professionals can help by initiating honest conversations about loss and death with your family.

More than half of working adults whose partner passed away prematurely indicated that they were not financially prepared for the loss.¹ Reaching out to a financial advisor can help relieve some of the burden by providing you with sound financial guidance and actionable steps for the future. A financial advisor can help guide you toward a better course of action for your finances while you focus on processing your grief.

Meet yourself where you are

Remember that it’s perfectly okay to allow yourself to feel all the emotions you’re experiencing after a major loss. Seeking help from a financial advisor can help you manage the anxiety that comes with the financial aspects of losing a loved one.