As Mary Todd Lincoln’s character in “The Widow Lincoln” faces dozens of unpaid bills for home furnishings, clothes and jewelry, she asks, “How will I ever pay these debts? I am nothing. I am no one.” On top of moving out of the White House, mothering her sons and moving forward with her life, Lincoln must deal with all these financial stresses. She no longer has her husband to rely on for emotional support, income or an identity. It’s a crisis many women in the 21st century face, too.
A recent article in U.S. News & World Report, titled “Modern Money Lessons from Mary Todd Lincoln,” reports that experts recommend participating in money management throughout marriage and preparing for the possibility of one day being on your own, like many women eventually are, due to divorce or death.
Becoming a widow often means a drastic change and a new way of life, whether in 1865 or 2015. For many, it means understanding how to manage finances by yourself and experiencing less income, along with debilitating grief.
The original article urges women to know their money thoroughly, regardless of life stage. Keep all financial paperwork, experts says, including estate planning documents, well-organized and easily accessible.
For example, couples should be able to answer these questions long before retirement:
- If my spouse were to die, how would that affect the household’s income?
- What would an expensive illness do to our retirement savings?
- If either spouse were to die, would the survivor be prepared to take over the management of the finances?
Both spouses need to have a basic grasp of monthly costs, saving and investment strategies, and the way to get to their funds quickly in an emergency. In addition, here are some tips for widows from the original article:
Replace Any Lost Income. Losses sustained from a pension, Social Security, and a spouse’s salary losses may be buoyed by the proceeds from a life insurance policy or other sources of money. Term life insurance, especially for young, healthy people, is relatively cheap. Consequently, it may make sense to purchase a 20- or 30-year policy before you reach your 40s.
Select Your "Trusted Person." Single seniors should have an individual who’s able to make financial decisions for them in case they become incapacitated.
Manage Your Financial Risk. Studies show that women tend to invest more conservatively than men. While spouses tend to balance each other out, when women become widows, it can mean that they might be overly cautious in their investments, creating a risk to inflation.
Experts also generally recommend holding off on any big moves during the first year following a spouse’s death, since the grieving process can interfere with good decision-making. Mrs. Lincoln could barely manage day-to-day tasks and wasn’t willing or able to leave the White House for more than a month after Abe died.
Also create estate planning documents to make sure that all assets pass to the surviving spouse and are available to take care of the spouse and any minor children.
This story might be 150 years old, but its lessons still resonate today.
Contact an experienced estate planning attorney and be prepared come what may.
Reference: U.S. News & World Report (February 23, 2015) “Modern Money Lessons from Mary Todd Lincoln”