How to Maintain Financial Health and Prevent Escalating Debt if Your Spouse Dies

The subject of death is difficult to contemplate and is often considered a social taboo. People do not want to talk about the possibility or even think about it. Unfortunately, this lack of attention can cause financial burdens in the event that a spouse passes away. Therefore it is in a couple's best interest to do some advanced planning to ensure that the surviving spouse will be able to maintain their financial health and prevent an accumulation of excessive debt.

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Important steps to take

Make sure that both the husband and the wife have adequate life insurance coverage. The importance of this step can not be overstated. If the primary wage earner passes away than the remaining spouse will need to have income replacement to cover expenses. Coverage is also important for stay at home Moms. In this situation a need may be created to begin paying for child care. In addition, the husband would often take a sabbatical from work which is generally unpaid.

Begin a savings plan. Having a reserve of money for emergency situations allows for a cushion should an unforeseen tragedy occur.

Establish credit for each individual. If your spouse passes away this will ensure that a credit history has already been established.

Request a written copy of pension plan benefits. If you work for a company that offers pension benefits you will want to find out the specific details. Often times such benefits include a payment to the surviving spouse.

Both husband and wife should know where important records are located. Make sure that the bills, bank statements, security passwords and other important financial items are kept in a disclosed location. This will prevent any confusion and help to ensure that accounts can be accessed and bills are paid in timely fashion.

Be aware that the surviving spouse of a previously insured worker is generally entitled to social security survivors benefits.

Death is never an easy subject to deal with but it is a necessity in order to make preparations to insure the financial well being of the surviving spouse. Some simple steps can save your spouse from mountains of debt, ruined credit, and added pressure in this time of grief.

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About the author:

Mark Carney is a professional consultant with First American Debt Consolidation and Loans, a debt consolidation service specializing in financial education, credit counseling, and debt management services nationwide.