Thursday
Jan172013

Planning for Widowhood

All too often we wait until a tragedy strikes before taking necessary steps to protect ourselves and our loved ones. We are “reactive” to what life throws at us instead of “proactive.” For a married partner, widowhood (or widowerhood) is one of those inevitable tragedies we pretend to be "the unthinkable" –  until it is upon us. Then the surviving spouse, in addition to the grief associated with the loss, is vulnerable to depression, loneliness, abuse, exploitation and neglect. Legal and financial matters are ignored or poorly addressed, and the survivor winds up an easy prey to victimizers of the elderly.

There are a number of proactive steps we can take in advance of the inevitable. One such step is to use and follow a "Planning Checklist" and reviewing it at least once each year – inviting your loved ones to participate and utilizing the services of appropriate professionals. This step can protect you from added tragedy. Here are some useful Planning Checklist items and related planning activities:

  1. Make pre‑planning and estate inventories: a) List all vital documents (and related information) and where they may be located; b) List all professional advisors (attorney, accountant, insurance agents, financial advisors, stockbrokers, etc.), and their contact information; c) List all physicians and other health‑care providers and their contact information; d) List all assets by category and location.
  2. Give copies of the above lists to your loved ones and other key professional advisors.
  3. Make sure you have updated advance directives, such as your durable power of attorney, living will, health-care proxy, HIPAA-authorization form, etc.
  4. Make sure your will and other estate-planning documents (such as trusts) are up to date and still effectively dispose of your assets.
  5. Consider a Living Trust where applicable.
  6. Review all insurance policies with appropriate professionals.
  7. Know the location of all your financial materials, checkbooks, statements, bank‑books, records, accounts, receipts, tax returns, safe‑deposit boxes, etc., and then list them all on an inventory that can be easily found by your loved ones.
  8. Where there is special protection involving privacy and security (e.g., accessibility items such as keys, safe and alarm-system combinations, passwords, etc.), make sure your loved ones have a means to readily locate and make use of these protections.  
  9. Prepare a budget reflecting your monthly income and monthly expenses.
  10. Consider pre‑funeral arrangements and related planning and make sure your loved ones are made aware of your desires and can and will carry them out.
  11. Review your overall estate plan (your will, trust, etc.) at least once every three years and confer with your attorney respecting changes in your circumstances and the law that may impact your estate plan (see “life-changing event” discussion, below).
  12. Consider your long‑term‑care needs and related long‑term‑care planning.
  13. Review and update your own personal "Planning Checklist" once each year or whenever life-changing events occur.

Life-changing events can be subtle or dramatic. Aging is a subtle form of change. Death is a dramatic change.  They include births as well as deaths, illness and incapacity. The discovery of special-needs circumstances (where a child or grandchild may be developmentally challenged, have a drug or substance-abuse problem, etc.). They also include divorce, accidents, loss of employment (and new employment), damage to property (fire, storm-related, theft, etc.), changes in the law (e.g., new tax laws), economic change (recessions, stock-market crashes, etc.), and a change as to your residency, whether you move to anew city or into a new type of residence, such as moving from a single-family home to a condo, or moving into an assisted living or retirement community.

Not all life-changing events are grievous. You can suddenly gain an inheritance, win a lottery or obtain some other seemingly beneficial situation. Retirement (when not forced upon us) is usually a pleasant event, but it can be traumatic and fraught with special problems. Reaching social-security retirement age is a life-changing event, and the determination as to when to take retirement benefits (early, at full retirement age or late retirement age) are life-changing events. Likewise, when signing up for Medicare you face an important life-changing event.

There are other life-changing events beyond those enumerated here.