Housing Decisions after Losing a Spouse

Family and home go together. That’s why when a spouse passes away, it can throw everything into disarray—including your living arrangements. If you’re going through this difficult change or simply wish to be better prepared in case you need to face it someday, here are some practical tips that may help.

Don’t make any quick decisions

Losing a spouse is a traumatic event, even if it comes after a lengthy illness where you had some time to prepare yourself. In fact, it can be particularly distressing to shift gears from being a caregiver to being alone. Sometimes, it’s only after all the day-to-day routines have stopped that you realize just how much strain you were under.

Friends, family, therapists and financial advisors might provide different answers as to how long you should wait before deciding what to do with your home after losing a spouse. While there’s no hard and fast rule, in general, we think you should take several months or even a year to process your emotions before making any decisions that are likely to have a long-lasting impact.

Keep cash on hand at first

During the initial period, one financial planning guideline that may reduce stress is to keep some cash on hand. This will help you cover regular living costs plus the extraordinary expenses you will likely incur, such as funeral costs and fees related to settling your late spouse’s estate.

If you receive a life insurance settlement, it may be tempting to pay off your mortgage right away. Although this might seem like a good way to resolve any financial stress related to mortgage payments (and ultimately, it may very well be the best course of action given your circumstances), it’s a decision you should make in the context of your longer-term living arrangements and overall financial plan. For example, you may need to review your retirement income strategy and make several additions and subtractions to your monthly cash flow in the coming months.

We believe it’s usually best to hang on to your life insurance proceeds until you’ve had sufficient time to consider the big picture and choose the most beneficial course of action.

Weigh your housing options

Once the fog has cleared, it’s time to really weigh your housing options. Your vision of what to do next may evolve over the first few months. For example, you might start out thinking that you’ll stay in your home but then decide you’d rather be closer to family or live in a retirement community after trying out your new lifestyle for a while.

Here are some of the factors you might wish to consider:

• Income and expenses. How manageable are your current housing costs? How would they change if you moved? Remember to consider rent or mortgage, HOA fees, property taxes and assisted living fees, if applicable. Are you already retired or about to retire? What is the short- and long-term outlook for your income? Do you have any significant income or expenses that are likely to change?
• Home equity. If you own your home, how do you plan to use the equity that you’ve built? Is it okay to keep it tied up in your home, or might you need to access that equity for other purposes, such as supplementing your income? Is there a scenario where you would move to a new residence but keep your existing home as (for example) a rental income property?
• Family. Do you wish to move closer to any family members? Is there a child, sibling or other relative who may wish to move in with you? Living with someone full-time is much different than simply spending time with them on occasion, so be sure to consider whether cohabitation is practical and manageable for everyone involved.
• Friends. You may be involved in work, community, socializing and other activities that keep you in touch with friends. Maintaining a network of strong connections tends to have a positive impact on mental and physical well-being. These relationships may become even more crucial as a widow or widower. How will your current or future living arrangements impact your ability to remain socially connected?
• Health. Do you have the physical ability to maintain your current home? If not, what kind of help might you need to hire? Also consider if you’d need to adapt your home to reflect potential physical limitations as you age. Do you anticipate wanting or needing assisted living in the future?
• Interests and amenities. It’s nice to live close to the places you go, whether that’s shopping, friends, healthcare services or the beach. If you’re thinking about moving, will you still have access to these important things? How could this change if you were no longer comfortable with driving or encountered certain mobility issues?

These housing decisions will likely require some serious contemplation. You might have children, grandchildren and other loved ones to account for. We believe you should consult with your Corient Wealth Advisor regarding your financial plan and how losing a partner may impact it. You may also wish to engage other professionals, such as a life coach or counselor, to help you gain clarity. Additionally, a realtor can help you assess your housing options, while tax and legal advisors might be needed to assist with changes to your financial or estate plan.

Whatever you decide, it’s essential to acknowledge that losing a spouse is a major life event and that it’s normal to have a strong emotional attachment to the home you shared. Do not feel rushed or let anyone push you to act quickly. Think things through carefully and, when it comes to important matters, proceed at a pace that you find comfortable so you can be confident and fully at peace with your decisions.