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 are going through this difficult change, or simply wish to be better prepared to face it someday, here are some practical tips that may help.

Don’t make any quick decisions

The loss of a spouse is a traumatic event, even if it comes after a lengthy illness. In fact, it can be particularly distressing to shift gears from being a caregiver to being alone. Sometimes, it is 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 give you different answers as to how long you should wait before deciding what to do with your home after losing a spouse. While there is no hard and fast rule, 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 expenses, 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, it is a decision that should be made 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 is 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 is time to really weigh your housing options. It is possible that your vision of what to do next will evolve over the first months. For example, you might start out thinking you will remain in your home but decide that you’d rather be closer to family or in a retirement community after trying out your new lifestyle for a while.

Here are some of the factors that you might consider:

Income and expenses

How manageable are your housing costs now? 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? And 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? Is it okay to keep it tied up in your home, or are there reasons 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 a rental income property, for example?

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?

Friends

You may be involved in work, church, socializing and other activities that keep you in touch with friends. These relationships may become even more important 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? 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 is shopping, friends, health care services or the beach. If you are thinking about moving, will you still have access to these things? How could this change if you were no longer comfortable with driving?

These housing decisions may require some contemplation. You might have children, grandchildren and other loved ones to account for. We believe you should consult your wealth advisor regarding your financial plan. You may also wish to engage other professionals, such as a life coach or counsellor to help you gain clarity, a realtor to help you assess your options, and tax and legal advisors as 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. Think things through and move at a pace that feels comfortable for you.

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