Today’s post is an emotional and powerful one. As you may know, the In Case of Emergency Binder is incredibly important to me and the site’s mission. I want to help all families get prepared, just in case. To remove even a little bit of stress for our kids and loved ones if anything was to ever happen to us.
So, when Dawn from FI and Wine heard about the ICE Binder and offered to share her story of losing her husband suddenly as a stay-at-home mom of a three-year-old, I was honored.
I can’t imagine how hard this was to live through. And it couldn’t have been any easier to write. Therefore, while I usually add photos, tweak and format posts from guest authors, I don’t feel as though I have the right to alter this piece in any way.
This is Dawn’s story.
My husband was in charge of the finances.
He managed the large purchases, the healthcare, insurance and savings accounts. He was in charge of most of the bills. I had my own credit card for making personal purchases but otherwise, we shared a checking account and he managed the rest.
When he passed away, I was completely unprepared.
This became the most difficult period of my life. I suddenly went from being a stay-at-home mom to a single mom with no career and no income.
I was devastated.
Not only for myself but by the reality that my son would never see his father again. I couldn’t imagine life being any worse.
Then, the bill collectors started to call. And they were not very nice or understanding.
I didn’t have very much time to grieve the loss of my husband. There were so many financial tasks to manage and I didn’t know where to start. I couldn’t find many of his accounts. Of the accounts I could find, I couldn’t access them.
The more digging I did, the worse the financial picture became.
There were many things I learned during this difficult time. I learned how naive I had been to rely on my husband to manage the finances. And I learned how ill prepared we were for an emergency.
So much of the stress and emotional turmoil I experienced was avoidable and unnecessary. By setting aside a bit of time to discuss finances and develop a family plan, we could have been more organized and prepared for the worst.
In this post, I’ll discuss the main things I wish I had known when my husband passed away.
A Full Picture of the Family Finances
It didn’t take very long for me to regret how completely I relied upon my husband to manage the family finances.
I was 8 years younger than my husband, so I assumed he had the experience and knowledge to handle all of the accounts. We lived a very comfortable lifestyle, I was a stay-at-home mom and had no indication that I needed to be more involved. My husband’s main income was from his family real estate business and since it didn’t directly involve me, I stayed out of it and managed our home.
Sadly, it was a tremendous shock to realize the financial position I was in after my husband passed away. I can only assume he wasn’t aware of the implications, either.
Since we had purchased our home before we were married, the house was in his name and did not legally transfer to me. His reported income from his family business was low, leaving minimal social security benefits to support me and my son after he passed away. The life insurance policy hadn’t been completed and was therefore inactive. He also wasn’t in the habit of saving for retirement and there wasn’t much in his personal 401k account.
If we had reviewed our finances and openly discussed what we had and what our financial goals were, I believe we would have been more proactive about managing them better.
Additionally, If I had established a plan to protect myself and my son in the event of his death, I would have been more aware and prepared. I could have learned how to manage the finances in the event that I had to. And, as a team, we would have made better choices.
Individual Savings Accounts
I married right after finishing college and worked for two years before we had our son. We had a joint checking account and I contributed to the home finances as well as my own retirement savings account.
I never opened any other account because I didn’t think it was necessary. But when my husband passed away, I had my retirement savings and little else. I didn’t want to access any of my funds because taxes and early withdrawal penalties wouldn’t have left me with much. Instead, I sold all our furniture and lived on a few thousand dollars until I could find a job.
I found one savings account under my husband’s name and was able to transfer the account over to my son, who was listed as the beneficiary. Since it was a smaller amount than I expected to find, I believe there was probably another account somewhere else. However, I didn’t any information to find or access it.
Had I known better and not relied so heavily on my husband, I would have been contributing to a cash savings account myself. We could have made a list of what accounts we had and discussed how to distribute funds in the event that something happened to either one of us.
Insurance Policies in Place With All Account Information Laid Out
It was devastating to learn that my husband’s life insurance policy wasn’t completed. And honestly, 10 years later I’m still mad and disappointed by this. It was just so irresponsible.
I wish we had had the foresight to discuss and plan for the worst case scenario. With some discussion, we would have made this a priority.
An Overview of All Debt – And a Plan in the Event of a Loss of Income
Just a few months before passing away, my husband purchased a brand new car.
I will never forget how heartbreaking it was every time my son would see it in the driveway and get excited to see his daddy. He would look out all the windows trying to find him. And I would have to explain over and over again that even though the car was there, his dad was not.
That car quickly became the source of other problems. It didn’t take long for the debt collectors to start calling. And it wasn’t the only debt. There were payments for things I didn’t even know about. The best I could do was explain my situation and assure them that if I found any money to resolve the debts, I would. Eventually, they stopped calling, but it took many, many months of hassle and dread.
Again, just a short discussion and planning session would have prevented much of the ordeal I went through. It wouldn’t have taken my husband much time to list all of his debts so that I could be prepared to manage them if and when I ever had to.
List of All the Bills
Almost all the household bills were in my husband’s name. I did my best to locate each account and cancel services, but there were many that I couldn’t find. The longer it took me to find account information, the more delinquent the account would become. This added to the number of nasty phone calls I was receiving.
I can’t express how frustrating it was, during an already difficult period, to realize how easily we could have compiled a list off all the bills, how to pay them, and all the account information. This would have saved me so much time and frustration.
List of All Service Accounts
Years after his death, I was still receiving calls and mail regarding random service accounts that he owed money for.
A list of all accounts and how to access them would have given me the ability to shut them down and prevent extra debt and headache.
A Review of Social Security Benefits
A couple months after my husband’s death, I received a notice that I could file for widower’s benefits. I set up an appointment at the local social security office and learned that the benefits paid to both me and my son were just a fraction of what I was expecting.
Since my husband was self-employed and didn’t have high social security taxes, the benefits paid out were lower than typical. It felt like yet another area of irresponsibility that left me and our son in a horrible and unplanned financial position.
Had we been aware that this was going to be the only source of income left to us in the event of his death, I can only imagine my husband would have been more motivated to finish up the life insurance policy.
A List of Assets and How to Manage Them
In hindsight, I think my husband planned to rely upon his family’s business and investments in retirement. He had designated our son as the beneficiary for most assets as well as his portion of the business.
This plan could have made sense if I had an income or my own assets. But this plan did nothing to support me and my future without him. It didn’t help me with the day-to-day living expenses to support our son.
I blame this predicament on myself and my naiveté. I wish we had discussed our future, how together as a family we would save and prepare for retirement, and how we needed to manage our assets. Through open discussion, we could have identified areas of weakness and I would have advocated for myself and protected my own future.
Burial and Memorial Preferences
I was so overwhelmed and devastated after my husband’s death that managing funeral arrangements was more than I could deal with. His mother was kind enough to take over this task.
There were many details that we were unsure about, simply because we had never discussed his preferences. There were many costs associated with burial and memorial services and I was in no financial position to cover them.
While no one wants to contemplate their own mortality, let alone plan for the loss of a loved one, this is one detail that is so much easier to face before there is a need to. How I wish we had been better prepared for this.
If we had discussed each of our personal preferences, we would have had peace of mind that we could honor the wishes and traditions of the other. And we would have been better prepared by establishing life insurance policies to cover burial and memorial costs.
A Plan for How My Son and I Would Manage in the Event of My Husband’s Death
I can’t imagine how my husband would feel if he were to know just what we went through when he died. Not only the immediate aftermath, but the years of hardship that we have experienced since. He wouldn’t have wanted us to suffer this much.
A plan would have prevented much of what we went through.
It was years before I was able to become self-sufficient. I had to go back to school full time and place my son in daycare. The stress of managing everything; school, full-time work, single-motherhood, my son’s emotional burden of growing up without a father, commuting and managing finances, left me living each day in crisis mode.
My health suffered. My life, and that of my son, became radically different from what we first envisioned as a complete family.
With proper planning, the changes didn’t have to be so extreme. We could have had a financial cushion and time to recover and adjust. I would have felt more confident that I could manage the finances. I would have been better prepared.
Learning From the Struggle
It has now been 10 years since my husband passed away. The event of his passing forever changed my life. I was forced to quickly learn how to earn money for my family and manage my income. I began reading every book on personal finance and investing that I could get my hands. Then, I became focused on building a strong financial future for myself and my son.
Today, I continue to work diligently to reach financial independence so that I never have to feel financially unprepared again.
It doesn’t take much time or effort to set up a will and a life insurance policy. And it doesn’t take much time to organize a list of all the family accounts, debts, bills and assets so that they are easy to access and refer back to.
As painful as it still is, I understand how life-changing it is to be organized and prepared for the unexpected. A significant amount of the emotional trauma of a death in the family can be avoided by having a plan.
I wish so much that I had known this before losing my husband. I wish that he had thought about what the consequences of his death would be for the two of us.
And I hate how mad I still am that he left us the way he did. It didn’t have to be so hard.