How to Help a Grieving Parent Manage Their Finances
The death of a spouse is one of the most heart-wrenching events in a person’s life but one those in the 65+ crowd must face. Here are a few tips to help your aging parent, friend or relative manage their finances in the midst of unbearable grief.
● Encourage thoughtful decisions. The Financial Industry Regulatory Authority, or FINRA, cautions against making hasty decisions immediately following the death of a spouse. Specifically, you can help your loved one avoid a knee-jerk reaction when it comes to housing, employment and their retirement plans. Seniors with significant assets should also be alerted to the financial pitfalls associated with making too many changes too soon. For instance, changing financial advisers, selling investment properties, closing a mutually owned business, or cashing in on stocks and bonds.
● Talk about financial scams. Unfortunately, seniors, especially those who have recently lost their long-term spouse or partner, are often targeted by scammers intent on cashing in on their loneliness and perceived financial windfall. The Association of Certified Fraud Examiners explains that scammers will go to great lengths, including browsing the obituary section of the local newspaper to pick their targets. Discuss this possibility with your loved one and caution them against giving money or personal information to anyone with whom they do not make initial contact.
● Gather documents relating to insurance, investments, and bank accounts. There are numerous documents and account numbers that must be collected following the death of a spouse. This may be difficult if the surviving senior historically had little to do with financial matters. Help them go through their spouse’s files and organize information including credit card statements, bills, life insurance policies, tax documents, and retirement account information. Kiplinger also suggests gathering military discharge papers and at least 10 copies of the death certificate, which may be required to transfer real estate titles, veteran benefits or ownership of accounts.
● Find a trusted family member to make decisions on their behalf. It could be yourself, a sibling, or adult grandchild, but it may be wise to encourage your loved one to relinquish some decision-making duties to a trusted family member. If the surviving spouse is suffering with declining health or cognitive impairment, a power of attorney may be necessary. Depending on their health, you may also put forward the idea drafting a living will. Medicare.org explains this is a legal document that will allow your loved one to specify which medical treatments they do or do not want if they become unable to express their desires down the road.
● Be by their side. Perhaps most importantly, you should simply be there to offer your support, guidance and advice. Seniors are often overwhelmed at the sheer number of decisions they must make immediately following the death of a spouse. An example of a situation that could take financial advantage of their fragile emotional state is making funeral arrangements. Parting.com notes that the average funeral cost more than $10,000, a significant financial burden for a senior with a limited income. This figure can climb much higher if the survivor is emotionally blackmailed into purchasing a more expensive casket, unnecessary memorial services, or intricately detailed headstone. Business Insider claims that predatory marketing practices can increase funeral expenses by 1000 percent.
When your loved one is facing the emotional turmoil of burying a spouse, you don’t have to sit by and watch them make financial mistakes that have long-term consequences. While you may not be able to ease their pain, you can cushion the blow of their loss by helping to prevent money mismanagement. Encourage thoughtful choices, discuss potential scams, and, if necessary, offer to handle their finances until they are ready to take on the burden of running a home alone.
