The unexpected death of a spouse or an unanticipated divorce could be one of the most trying times in a person’s life.
Along with a myriad of emotional and psychological adjustments, becoming suddenly single can bring about major changes in long-term financial goals. The need to be cautious and careful in those first single months is imperative.
One of the most important things to be aware of is that one should proceed cautiously when making big financial decisions. Heightened emotions can cause any person to make poor decisions. It is important to take the time to review all options, and remember in most cases, a decision does not need to be made immediately.
One of the first steps is to get organized. Death or divorce can leave one feeling scattered and confused. Gather financial records and all other associated paperwork in need of attention. A good list to start with includes joint tax returns, retirement account records, insurance policies, brokerage and bank account statements, trust documents and wills.
The person or company in charge of each of these documents should be contacted to be made aware of the new single status. Keep a file of all these documents and supporting papers.
Once all these records are obtained, take the time to research them and make any changes, such as beneficiary designations for life insurance, retirement accounts and similar documents. Necessary changes will also need to be made to a will. This is also a good time to review all insurance coverage and make the needed adjustments.
Lastly, look over investment plans to ensure they reflect any adjustments to personal risk tolerance and financial objectives. Carefully examine a budget, review all bills and take time to determine what it will take to live comfortably. Making a budget often shocks people when they find out how much they truly spend in a month. Overspending may require reprioritization.
Finally, it may be time to assemble a team of experts. Don’t be afraid to call on experts to help out. An attorney, CPA and financial consultant can offer insight and expertise that may take some of the stress out of a trying situation.
This article is provided by Dave Dupont, a Financial Advisor at RBC Wealth Management. RBC Wealth Management does not endorse this organization or publication.
RBC Wealth Management, a division of RBC Capital Markets LLC, Member NYSE/FINRA/SIPC