I've been working on a project with MSN called "The Invested Life" over the past several months. One of the things that came up on a regular basis was dealing with the passing of a loved one, and how this might affect us all financially.

The person I worked with, a woman named Jennifer Sherwood, had just lost her husband after being with him for two decades. In addition to dealing with the emotional devastation of losing the man she'd loved so dearly, she was also trying to work through the financial complexities that come with handling all of the final arrangements.

In the case of Jennifer, the financial challenges of her husband Scott's passing were numerous: There was the time she missed from work in order to make long visits to the hospital. There was the lost income resulting from her husband getting sick. There were the massive medical bills that come from illness, even if you are insured. What's worse is that these are just a few of the things that happened before her husband had even died.

After death, one must deal with the cost of the burial, getting assets out of the name of the deceased, and closing all the doors on the financial agreements that were made when the person was alive. For Jennifer, one of her most emotionally difficult tasks was to take certain accounts out of Scott's name. By changing the names on the accounts, she almost seemed to be finally confronting the fact that he was actually gone.

Another interesting thing I noticed while working with Jennifer was that her spending and saving habits were affected by her emotional turmoil. With her husband gone, she saw nothing to look forward to, and spent money like it was going out of style. The investment accounts were consistently raided for expensive restaurants and trips to the mall, making matters even worse than they already were.

Here are a few things you can do to financially manage the death of a loved one:

1) Make sure you know where key documents are located: Life insurance policies, wills, marriage certificates, and other important documents should be kept in a place where they can be found by someone other than the person who died.

2) Make arrangements while you're alive so that people don't have to sort through your complex life after you're gone.

3) After your loved one has died, call their employer to check on what kinds of death benefits may have been in place.

4) As you prepare for your own death, try to leave clear instructions in a will regarding who is going to manage the money and make key decisions. Have a backup for that person just in case something happens.

5) Study the law if you have a deceased relative so you only pay the debts for which you are legally responsible. Quite a few bill collectors enjoy taking advantage of surviving family members after the death of a loved one.

I hate being the bearer of bad news, but we are all going to die. What's even sadder is that every person we love is going to one day be in a casket as well. So, enjoy life while it's in front of you and maximize that enjoyment by planning. You don't want to learn your lessons after it's too late.



Dr. Boyce Watkins is the founder of the Your Black World Coalition and a Scholarship in Action Resident of the Institute for Black Public Policy. To have Dr. Boyce commentary delivered to your email, please click here.