death of a spouse,financial questions?

[Peace Mickey Lovers]

I recently lost my husband unexpectedly. He was in his early 40's as am I. We have 2 small children DD 10 and DD 8. My 8 year old has special needs. I am working full time to cover our expenses. I am very blessed with friends and family who help me for the hour after school with the girls till I am home. My question is that I really do not know what to do with the life insurance money I have from his passing. The only debt I have is the mortgage. I really am afraid to invest in the market right now because I know i'll panic if I see that I am loosing the money. At first I was going to pay down the mortgage but the reality is that I have no pension or 401k. DH worked in a civil service job so we saved in his 401 and he had/has a pension.
Does anyone have and idea's
thanks
Lisa

 

[Grumpy's Gal]

So sorry for your loss. I recently read that after a death in the family which results in you having some money, the bets thing to do is put it in a safe savings acct for a year and don't touch it -- don't make any decisions while you are under stress of losing a loved one. I think Suze Orman is the one who advises that.

 

[RitaE]

You need a lawyer/financial planning team who specializes in these issues - not only what to do with the life insurance proceeds but also to guarantee your family receives the full Social Security or other survivor benefits that you qualify to receive. Also, if you don't have a Special Needs trust in place for your daughter it needs to be established and you need to carefully plan for any long term needs she might have, especially in the catastrophic case that she might also lose you someday. This is far more complex than can ever be advised on a message board.

Is your daughter enrolled in a School Special Education program? Most of the schools here have Family Resource co-ordinators who can point you to local resources. Also, if you have any local agencies (Easter Seals etc) they will be able to help.

I'm so sorry to hear about your husband. My deepest sympathies.

 

[BridgetBordeaux]

Sorry for your loss. It is good to hear that you have a nice support network in place. I suggest you find a fee based financial planner. You pay a fee for advice and they do not make any money on things you might buy as a result of their advice.

 

[8gr8mouseketeers]

I do not have any advice, but I just wanted to say, I am so very sorry for your loss.

 

[Eastern]

For now I would put the money in a safe place such as a short term CD or savings account. I would steer clear of anyone who sells financial products for now. They want to make a commission.

Make an appt with a lawyer who specializes in estate planning. Most allow a free consultation that basically reviews your situation and gives you an idea of what needs to be done. It takes about an hour to an hour & 1/2.

You can think about what they've said while you get a couple of other opinions. I realize you are not old, but an elder care attorney might be good as many of them also specialize in estate planning.

http://www.nelf.org/find-a-cela (how to find a certified elder law attorney in your state)

They will be able to explain the difference between a will and a trust, and what you should consider in making your decisions.

Good luck.

 

[chewysmom]

OP-I'm really not a financial expert , but if it were me, I'd put it in the bank and just sit on it for a while.

I really wanted to offer my sympathies though. I'm so sorry for your and your children's loss. You're in my thoughts and prayers. I can't imagine.

 

[phred52]

I am sorry for your loss

I strongly suggest that you DON'T DO ANYTHING with this money for at least a year, giving you time to heal a bit and your head to clear.... Plant that money for now in a CD, something 100% safe.

 

[mafibisha]

.
I realize you are not old, but an elder care attorney might be good as many of them also specialize in estate planning.

http://www.nelf.org/find-a-cela (how to find a certified elder law attorney in your state)

They will be able to explain the difference between a will and a trust, and what you should consider in making your decisions.

Good luck.

OP, I am so very sorry to hear of your loss. I'm sending you big hugs, and will pray for all of you. Its good you have so many supportive family and friends but I agree with many here. Try to wait a year before making any major decisions.

And re the link above for an elder law attorney - the link won't work, at least for me. I'd like to check this out for my mom and in laws, as I'm sure they're not aware of this type of thing.

 

[Mkebound]

You need a lawyer/financial planning team who specializes in these issues - not only what to do with the life insurance proceeds but also to guarantee your family receives the full Social Security or other survivor benefits that you qualify to receive. Also, if you don't have a Special Needs trust in place for your daughter it needs to be established and you need to carefully plan for any long term needs she might have, especially in the catastrophic case that she might also lose you someday. This is far more complex than can ever be advised on a message board.

Is your daughter enrolled in a School Special Education program? Most of the schools here have Family Resource co-ordinators who can point you to local resources. Also, if you have any local agencies (Easter Seals etc) they will be able to help.

I'm so sorry to hear about your husband. My deepest sympathies.

This is the best advice you could receive. Please get professional help for both now and in the future. What would happen if something unexpected happened to you too? A professional will help you put a plan in place to ensure your future and your that of your children as well.

 

[ameraumi]

First, I am so sorry for your loss!

I went thru this exact thing a few years ago after my late-DH passed away from cancer. I was a total loss at what I should do with the Life Ins money, what needs to be paid off, ect.

Have you talked to Social Security yet and signed up for benefits? That is the first thing you need to do if you have not done that. Your children, as well as yourself if your income is not too high, will receive Survivor Benefits. The children until they turn 18 (in the case of your DD with special needs, maybe longer) and if you qualify you will receive benefits until the youngest turns 16.

I sat down and talked with my financial adviser on what should be done with the life ins money after the funeral had been paid. Late-DH made sure there was more than enough money for us to be taken care of for a while. We did have consumer debt so that was wiped out right away. He sat down and looked over my past taxes and what tax benefit there would be if I kept the mortgage. After looking at everything it made sense to pay off the mortgage. There was still a little left over and that went into different accts based on my future needs and my tolerance of the market.

 

[phamy76]

My mother died when I was 11 and my sister was 8.

Please make sure you apply for Social Security benefits for your children.

My dad was able to support us on his income and he put those Social Security benefits in a fund for my sister and I. He had to document everytime he used those funds (school clothes, girl scout camping trips, etc).

There are great summer camps in my area that are for children who have lost a parent. Look into grieving groups for kids!


But, don't invest all of your money into one place until you can completely close out his part of the estate (in about 1 year).

 

[disney<333]

I'm so very sorry for your loss.

 

[Cheshire Figment]

If he was Federal a couple of immediate suggestions.

1. The Life Insurance is set into a money market fund and you will receive a checkbook for that fund. Sit on it for at least six months before you make any decision.

2. If you will be getting a survivor benefit, and he was covered under a Federal Health Plan maintain that health insurance. You will have the opportunity annually to change carriers, but if you give up the FEHP benefits you will never be able to get them back.

3. Wait at least six months until you do anything else.

 

[A Mickeyfan]

I am sorry for your what you and your family have to deal with.

First be sure to apply for the Social Security Death Benefits for your children.. that will be a great help in providing for them. As far as paying down the mtg, I do not think I would do that ....yet. If the house goes belly up, you will have no cash per say.. I think I would just leave it as is for now..

 

[Floridagal23]

I'm an estate planning attorney in NYC (we have a Nassau County office). I have zero investment expertise, but like others have said, you're not going to lose money in a savings account.

At this point, you need to make sure your own estate planning is in order in terms of setting up guardians for your kids (personal and financial) 'just in case" something happens to you, if you don't already have provisions for this in your current will. The attorney handling your husband's estate probably has the best idea of your assets (and his) and would be a good person to consult to make sure your will is up to date. You should also review and revise your health care proxy, power of attorney, etc., because likely, your husband was named as your agent, and while you probably have a substitute designated, it's best to name a new agent and successor or alternate.

If you need a rec for someone in your area, feel free to PM me, or alternatively, you can contact the New York bar for recs of people who practice in this field.

 

[Peace Mickey Lovers]

Thank you forvall your thoughs and prayers. I have been to ss and my girls are getting survivor benefits. I have an estate attorney and I am setting up trusts for both daughters along with guardians God forbid something happens to me. From what I hear all of you offering I am going to leave in savings account for now and not make any big decisions for at least a year.
Thank you again
Lisa

 

[kylmac]

Lisa-I just wanted to say I am so sorry for your loss. We are dealing with getting a trust set up for our autistic son and our 1st consultation was free. The lawyer specializes in wills and trusts-he has a child with special needs as well.
Elizabeth

 

[MrsPete]

I recently lost my husband unexpectedly. He was in his early 40's as am I. We have 2 small children DD 10 and DD 8. My 8 year old has special needs. I am working full time to cover our expenses. I am very blessed with friends and family who help me for the hour after school with the girls till I am home. My question is that I really do not know what to do with the life insurance money I have from his passing. The only debt I have is the mortgage. I really am afraid to invest in the market right now because I know i'll panic if I see that I am loosing the money. At first I was going to pay down the mortgage but the reality is that I have no pension or 401k. DH worked in a civil service job so we saved in his 401 and he had/has a pension.
Does anyone have and idea's
thanks
Lisa

Without knowing how much insurance you've received, how much you earn, how comfortable you are financially on your own . . . I'd make this suggestion:

Divide the insurance four ways. Put aside 1/4 for each child's education. Use 1/4 as a start for your retirement account. Finally put 1/4 towards the mortgage; possibly look at refinancing once this is done so that you can have a smaller monthly payment (more manageable on one salary, and with that extra room in your budget, start contributing more to your retirement accounts). This doesn't totally take care of any one need, but it gives you a good "jump start" towards all of them, and that together with your salary will give you stability.

However, I will agree with the poster who suggested that you go to a financial advisor. Someone who can look at your whole financial picture and give you good advice. You won't get a second chance to get this right, so don't be in a hurry to make a decision. Keeping this money in a savings account for a while, or buying a one-year CD isn't a bad idea.

And what about his pension? If I were to die before retirement, my husband would receive a lump-sum payment -- not nearly what I'd get if I live to collect my payment, but something.

Finally, kudos to your wise husband for buying life insurance. No one wants to think about that topic, but clearly it was a good choice.

 

[jsmith]

Im sooo sorry for your loss-its painful under any circumstances.
Unforunately i ami n a place where i see and deal with this far too often lately. For now-put the money in a safe place and do nothing. You need to allow a year or more to pass, time to come to grips with your grief and to think clearly. Sign your children up for SS benefits, and learn to live your new reality. Then talk to a financial advisor about investments. One can hope that in the intervening time the investment climate will improve.
As long as you can pay your mortgage and be comfortable paying it off is NOT the best use of funds-and a good financial advisor will tell you this--in the currently market you risk loosing your principle if the market devalues. If you need to shrink your payment paying it down and refinancing may be an option but if you anticipate needing fund education for your daughters dont sink the whole sum into it.