Losing a spouse is a major life event. No more obvious statement could be made, yes? This is especially true when the surviving spouse was not the head of household breadwinner.
Such was the case of Mary Todd Lincoln after her husband Abraham was assassinated. The world changed and so did hers.
The story of Mrs. Lincoln in the days following that fateful evening at the Ford Theatre has, ironically, been the subject of a recent plan in that very same historic theater. The play, titled "The Widow Lincoln," chronicles the family and financial catastrophe that followed the assassination.
It was not pretty.
Expelled from the White House with children in tow and bills to pay, Mrs. Lincoln's experience provides lessons for widows everywhere, whether widowed in 1865 or 2015.
Becoming a widow often means a drastic change and a new way of life. For many, it means understanding how to manage finances by yourself and experiencing how to survive on less income, let alone with debilitating grief.
A recent article in U.S. News & World Report, titled “Modern Money Lessons from Mary Todd Lincoln,” reports that experts recommend participating in money management throughout marriage and preparing for the possibility of one day being on your own, like many women eventually are, due to divorce or death.
The original article urges women to know their money thoroughly, regardless of life stage.
Keep all financial paperwork, experts says, including estate planning documents, well-organized and easily accessible.
For example, couples should be able to answer these questions long before retirement:
If my spouse were to die, how would that affect the household’s income?
What would an expensive illness do to our retirement savings?
If either spouse were to die, would the survivor be prepared to take over the management of the finances?
Both spouses need to have a basic grasp of monthly costs, saving and investment strategies, and how to access funds quickly in an emergency. Cash is king.
Here are some practical pointers for widows from the original article:
Replace Any Lost Income. Losses sustained from a pension, Social Security, and a spouse’s salary may be rescued by the proceeds from a life insurance policy or other sources of money. Term life insurance, especially for young, healthy people, is relatively cheap. Consequently, it may make sense to purchase a 20- or 30-year policy before you reach your 40s.
I have never heard the widow of any of my clients complain about the life insurance their husbands had.
Select Your "Trusted Person." Single seniors should have an individual who’s able to make financial decisions for them in case they become incapacitated. Do you have your general durable power of attorney and even a revocable living trust inked?
Manage Your Financial Risk. Studies show that women tend to invest more conservatively than men. While spouses tend to balance each other out, when women become widows, it can mean that they might be overly cautious in their investments. As a result, their long-term financial security may be at risk due to inflation.
Experts also generally recommend holding off on any big moves during the first year following the death of a spouse. Why? The grieving process can interfere with good decision-making. Mrs. Lincoln could barely manage day-to-day tasks and was not even willing (or able) to leave the White House for more than a month after her husband died.
While this story might be 150 years old, the lessons we can learn from it continue to resonate.
Teaching point: Contact an experienced estate planning attorney and be prepared come what may.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri) and to download free tools to help you organize your estate, visit my estate planning website.
Reference: U.S. News & World Report (February 23, 2015) “Modern Money Lessons from Mary Todd Lincoln”