Financial & Estate Planning

Life After Marriage

WORTHWHILE CONVERSATIONS

Life After Marriage

Q: Why is financial management potentially a challenge for new widows and divorcees?

It may come as no surprise, but there is a gender gap in family financial planning.  Since 2000, Prudential has conducted a continually updated biennial study on Financial Experience & Behaviors Among Women, which surveys women’s attitudes, behaviors and financial knowledge, as well as their financial goals and confidence in meeting those goals.  Though counter to our modern cultural discourse, the most recently published update to the survey continues to reveal that a minority of married women judge themselves to be “taking the lead” or “taking control” of family financial planning decisions.  Such a tilt in favor of ceding the financial leadership to a male partner could leave a significant body of married women feeling unprepared if they find themselves suddenly single.  Considering life expectancy differences between men and women, as well as divorce statistics, the simple fact is that a large number of married women will face financial management responsibility alone at a later point in their life, when divorced, or widowed.

Q: When you say “financial management”, are you referring to investment decisions?

That is part of it, but for many women, the challenges may be more basic.  We’ve lived through a lot of these situations in our firm’s 47-year history.  Consider a woman who has chosen to remain relatively non-engaged in the family’s financial management and suddenly loses her husband to premature death.  She may be facing the sudden reality that the mortgage payments are overdue because her late husband was the one tending to these bill-paying chores.  Or it could be the challenge of needing to make quarterly estimated tax payments and not being familiar with the rules and deadlines.  There may be pressing cash needs to deal with hospital and funeral bills, while the filing of insurance claims can be an unfamiliar and intimidating process.  In some cases, many of the financial asset accounts are titled in her late husband’s name, so bank and brokerage firms may restrict access to accounts until the legal estate process is completed.

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