I just took a call from a client grieving for her husband of 42 years.
She’s understandably under tremendous emotional stress. Frankly, I was amazed at the efficiency with which she was approaching her situation.
Within a few weeks of his death, she had already calculated how much her income would be reduced. In fact, that was why she called me. Her money and marriage were inextricably meshed.
She was distraught over the loss of her husband….and at the same time…very concerned when she calculated that her income would be reduced by $35,000. In fact, she sounded worried sick about it. She was even talking about selling a prized antique car that she loved dearly in order to make up for the short-fall.
I’ve known this woman (a Ph.D.) for about 20 years and I can vouch for her warmth, high intelligence and rational behavior.
That’s why I found it odd that she completely overlooked the fact that her expenses were about to drop more than her income. We went through everything together and calculated a monthly savings of over $4,000 due to reduced medical expenses.
Also, my client completely overlooked the fact that her husband had an insurance policy that she could make a claim on. (This was a universal life policy my client’s husband had purchased more than 40 years ago. Of course, I can’t stand whole life or universal and this was an example why — my client’s claim would mean she’d get a whopping 1.96% return on her money.)
Why am I bringing this up?
First, while my client was fortunate enough to have time to prepare for her spouse’s death, we all don’t have that luxury. I strongly suggest that you write out a “survivor’s plan” today.
You can take your time to improve it. Tweak it. Whatever. But put something together today.
Second, calculate reduced income and expenses. Have a realistic scenario of what it would cost your survivor to live on and what resources will be available.
Third, and perhaps most important, expect to be in shock and incapable of making rational decisions. Expect it. Know that you (or your spouse) are going to have to face this situation sooner or later. When it happens, you will simply be incapable of making smart decisions. Honor your marriage and money. Have a backup person and don’t make it your adult children. I strongly suggest you use a non-relative because it would do no good to rely on another person equally impacted by the loss.
If you have ever read my story, you know that my parents did none of the above. The result was the complete destruction of my immediate family. I take this stuff really seriously as a result.
While the worst that could have happened to my client was that she would have sold her car when she really didn’t have to and worried over nothing, I know the results can be much more devastating. Take a few minutes right now and take care of this.