During this period, a widow should try to focus on gathering, organizing and making an inventory of all assets and liabilities.

She will need to quickly get control of the household bills if she was not paying them previously. She will also need to collect and organize her husband’s financial and personal effects, including:

Social Security Survivor’s Benefits
If a widow is 60 or older, she may collect survivor’s benefits from the Social Security Administration ranging from 71-1/2 percent of her deceased husband’s benefit amount beginning at age 60 to 100 percent beginning at age 65. A disabled widow can collect 71-1/2 percent beginning at age 50. Widows with children may be eligible for widow’s benefits at any age when caring for a child age 16 and under or who is disabled.
If both husband and wife were receiving Social Security benefits before he died, she is entitled to the greater of the two benefits. Even ex-husbands or ex-wives and their children may be eligible for survivor’s benefits.
For an estimate of how much you might expect as a surviving spouse, fill out a statement request online, call the Social Security Administration at 1-800-772-1213 or visit a local office to obtain Form SSA-7004 (Request for Personal Earnings and Benefit Estimate Statement).
  • All bank accounts
  • Mutual fund and brokerage holdings
  • Safe deposit box
  • Vehicle titles
  • Home mortgage
  • Medical insurance
  • Life insurance
  • Social Security benefits
  • Retirement and annuity benefits
  • Credit cards and travelers checks
  • Unpaid salary
  • IRAs, 401(k), pension and profit-sharing
  • Workman’s compensation benefits

“What is really frightening is that people don’t know where everything is,” says Hannon. “Many women don’t have a clue where a lot of the investments are or even who their life insurance agent is. They may have paid all the household bills and wrote the checks each month, but they didn’t deal with the big-picture stuff. That’s very traditional.”

Once a thorough search of files, home, autos and the workplace is completed, it’s time to assess the widow’s complete financial picture. If the couple had a certified financial planner, accountant or lawyer, this is a good time to compare notes with them. Are there assets — or liabilities — that may have been overlooked?

Common sources of death benefits include the Social Security Administration, the Veterans Administration, employment coverage and personal life insurance.

A more thorough search for death benefits can be time well spent. In addition to a life insurance policy, there may be accidental or sudden death benefits attached to credit cards, bank accounts, loans, memberships in unions or organizations, current or previous employers, or even home, auto or health insurance policies.

Taking off

Once a widow has a grasp on her financial situation, it’s time to notify all concerned parties of her husband’s passing (include a copy of the death certificate as needed) and transfer such things as credit cards, licenses, titles, bank and retirement accounts into her own name wherever possible. This is also a good time to update her own will and life insurance beneficiaries.

The issue of moving often comes up once the financial picture is clear. For most widows, expenses will still run 80 percent of what they were before their husbands died, according to WISER. For any number of reasons, including financial, a widow may decide to move or downsize.

Armstrong advises widows to hold on to their house, at least initially, even if it means a sudden change of lifestyle, such as taking in a roommate to make ends meet. The emotional security, especially for her children, may mean far more than any financial advantage.

“The biggest mistake I see people making is wanting to pay off their mortgage,” she says.

“Often, a widow of any age wants to pay cash for the house because at least they won’t have that bill. But with interest rates still at decent levels, it’s better to have some liquidity rather than tie it all up in the house. If they’re buying a new one, don’t buy off the mortgage because it’s going to be harder to pull that money out later.”

Free flight

At some point in the first 12 to 18 months, a widow may receive one or several large payments, often from a life insurance or pension fund disbursement. This can be the financial updraft they need to fly — or the invitation to a crash landing.

“When the women I talked to would get a big life insurance payout, for example, they would just flip out. What do I do with this?” says Hannon. “The advice is don’t do anything for six months. Just chill out. Take some time to learn about investing, maybe take a class at a community college, find a good financial adviser you can trust, either through a friend or by interviewing them yourself. Most people recommend not making any fast moves with that kind of money.”

A widow’s best choice may be to park the windfall in a series of rolling CDs or a money market account until they feel comfortable with the mechanics of investing it. The same holds true for the profits from the sale of a house, which may be held for up to 18 months without penalty before reinvesting. That way, her nest egg will be FDIC insured, earn a moderate return and be available until she figures out how to build a portfolio around it.

If she’s the sole beneficiary on her husband’s 401(k) plan, she may be able to roll that money into her own plan or have it transferred into her name as a surviving spouse’s IRA.

But Armstrong says to handle life insurance carefully.

“Don’t run and put it in an annuity,” warns Armstrong. “That’s something widows often do; they like the idea of having a steady income stream for the rest of their life. But if you move it to an annuity and start getting monthly payments, it seems like a lot now, but 10 years from now it’s not going to be enough and they’re not going to be able to do anything about it because it has gone to the insurance company.”

Nor is this any time to spend lavishly.

“I’ve had young widows who say they spend at the same rate as when their husband was alive even though they couldn’t afford it because that way they could pretend he was still alive,” Armstrong says. “There’s a lot going on there. The big thing is, try to hold on to that money.”

Hannon agrees: “Don’t make any big investments. Have lunch with a friend one day a week, but don’t buy a Mercedes.”

Says Armstrong, “The sooner they can get some grip on their finances, the easier it will be on them.”