By P. Mark Accettura, Esq. and Lynn Gross, Esq.

Your mortgage company, your daughter’s college, and the gas company don’t care that you’ve just lost a spouse. For these and other creditors, it’s business as usual. Clients are often hurt and angry that they must answer to uncaring credit department employees when, after the funeral, their monthly note is overdue. They cry, “Don’t you understand that I’ve just lost my spouse?” Unfortunately, the reality of day-to-day living isn’t suspended by your spouse’s death.

The death of a spouse can be a rude awakening. Not only must you now manage your household alone-a responsibility for which you may not have been well prepared even under the best of circumstances. You must also address the myriad of new responsibilities resulting from your spouse’s death.

Ready or not, important tasks must be attended to. Get help, get counseling, but get things done. Pay professionals if you’re not able, literally or emotionally, to take care of business! The cost of professional help pales in comparison to costly mistakes. The sooner you get started, the better. This work will not only avoid problems down the road, but also may momentarily distract you from your grief and sense of helplessness during this difficult period. “Too much to do” is better than “too much time to ruminate.”

GETTING STARTED

Getting started is more important than where or how to start. That said, as a matter of pure necessity, you’re going to need cash, cash and more cash. You will quickly discover that much of your net worth, no matter how substantial, isn’t readily accessible. Real estate, IRAs, mutual funds, and retirement accounts may not be readily convertible to cash. Life insurance typically takes at least thirty days to process, so you won’t have immediate access to the proceeds. You might rely on credit cards to fly your kids in for the funeral and to pay the caterer, but you’re probably going to need to convert other assets to cash to satisfy your other short term needs.

Investigate the following potential sources of immediate cash:

1. Cash in bank, brokerage, or credit union accounts in your own name or held jointly with your late spouse.
2. Certificates of deposit (CDs) can be liquidated without penalty for early withdrawal at the death of an owner.
3. Borrow against your brokerage account. Because such loans are secured by your account there is minimal paperwork and therefore little delay. Borrowing is tax-free and is therefore preferable to selling investments.
4. The pre-age 59-½ penalty on your spouse’s IRA and annuities is waived at the account owner or annuitant’s death. However, the distribution is subject to income tax.
5. Obtain a cash advance on your credit card from your local bank.

Satisfying short-term cash needs is one of your immediate concerns. Once the storm of the first few months has passed, though, you will need to develop a long-term financial plan. That is, you must identify sources of income and necessary expenditures, to begin charting your long-term financial course. Chapter Five discusses how to prepare a detailed analysis of your income, expenses, and assets to determine your available cash flow.

Of course, you have every right to indulge yourself in the weeks following your spouse’s death. Weeks, however, shouldn’t turn into months and certainly not into years.

You may need to discipline your spending habits so that your available cash flow matches your income needs. Spending too little is just as bad as spending too much. We’ve seen wealthy widows agonize over even minor expenditures, often depriving themselves of deserved personal pleasures such as recreation, travel, and domestic help.

On the spending side, you should develop a budget, separating recurring essential expenses from discretionary expenses. The key is to live a full and thoughtful life within, not above or below, your means.