Stress and financial responsibility when losing a loved one

Regardless of how it happens, it can be shocking for anyone to experience the transition to becoming suddenly single.

The financial burden is amplified even more so if the surviving member of the couple was not the one responsible for managing the finances.

For many women and men in this situation, anxiety becomes the prevailing emotion. Not only are they walking through loss and drastic life changes, but they simultaneously face the overwhelming responsibility of making major financial decisions.

A common challenge for people in this situation is to know where to turn for support and guidance on financial matters.

The initial shock

Many of the new clients I meet in these types of situations are often feeling paralyzed. They know they need to take action on their financial life and start getting things in order, but they don’t know where to start.

Much of that inability to act comes from a fear of making a mistake.

It is very important to not feel rushed, but it also is important to establish a plan to help navigate the complexities of new circumstances and relieve some of the anxiety.

Prioritizing the near-term to-do lists along with long-term needs will help alleviate the burden of an overwhelming situation.

Initially it is best to identify where your monthly expenses are being paid from and how you will pay for your future needs. Making sure you have access to a credit card and a bank account is the top priority.

Establish an incoming basket of all relevant bills and confirm how they have been paid in the past will help clarify your budget.

Check your email for any electronic bills and determine how they are being paid. This also will help you gain control of the monthly expenditures and give you some time to focus on your longer-term needs.

Identify any electronic deposits to your bank account which can include Social Security, pensions and other sources of investment income.

Another great source of information would be to locate any other investments or bank accounts.

Look at your most recent tax return. This may reflect a paper trail of interest or accounts generating taxable account activity.

Once you are comfortable in knowing the monthly expenses are being paid with a predictable source of income, you can direct your thoughts to a longer-term plan.

Longer term

Start a binder now that includes lists of:

This is a partial list, but is a great starting point in becoming organized.

Oftentimes in these scenarios, people will find themselves with a life insurance payment, a divorce settlement or another type of financial windfall.

Without a strong financial foundation, all this money becomes a burden and a source of stress. Your goal is to create a plan that helps clarify your priorities both for the present-day and future.

This article is provided by Pete Alepra, a financial adviser at RBC Wealth Management in Cedar Rapids; peter.alepra@rbc.com. The opinions in this article are for general information only and are not intended to provide specific advice or recommendations for any individual.

RBC Wealth Management is a division of RBC Capital Markets, a member of the NYSE, FINRA and SIPC. RBC Wealth Management does not provide tax or legal advice. All decisions regarding the tax or legal implications of your investments should be made in consultation with your independent tax or legal adviser.