Many Bereaved Families "Not Prepared" for Financial Impact of Loss

The loss of a spouse or partner can unmoor many households unprepared to deal with household and financial management.

A new survey conducted by the New York Life Foundation and the National Alliance for Grieving Children found that half felt “not prepared” for the financial impact of a family loss. Six of 10 found it harder to maintain their lifestyle as well as to invest and save for their children's higher education.

A majority of households with a net worth between $100,000 and $1 million (not including primary residence) surveyed by Millionaire Corner say they are concerned about a family health catastrophe (58 percent), their own health (59 percent), the children or grandchildren’s financial situation (59 percent), the health of a spouse (62 percent), and maintaining their standard of living (62 percent).

Health concerns, not surprisingly, are more keenly felt by seniors over the age of 65, while respondents under the age of 54 are most concerned about setting money aside for retirement or being able to retire as planned.

But the passing of a spouse or partner can be the realization of their worst fears and many, according to the New York Life survey of 548 bereaved parents nationwide who still had children under the age of 19 living at home, find themselves struggling to handle the burden, both emotionally and from a household maintenance standpoint.

Two-thirds said it has been harder to put money away, while six in 10 said it had been harder to “find some money to spend on yourself.”

Saving for the short term, let alone the long term, has become more of a challenge for families in this struggling economy. A recent National Bureau of Economic Research study found that 38 percent of respondents said they would not be able to come up with $2,000 if an unexpected need arose within the next month. Twenty-two percent said they would “probably” be unable to cope.

A majority of households surveyed by Millionaire Corner were at least forward-thinking enough to have a will (72 percent), but only 12 percent said that any of their assets were held in a trust.