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A real widow's story....

 

Death is inevitable - and yet we try to avoid thinking about it. That is, of course, normal - but it can have catastrophic consequences. If we are to be a responsible head of the family and we don't want to leave chaos behind us, then we do need to think about it - now - to make sure that our loved ones don't pay for our thoughtlessness. The following is a true story…

The day started just like any other day, as John left for work that day and headed to the gym first, to do some cardio activity. Caroline, his wife, was blissfully unaware that this was to be the last time that she would see him alive: he collapsed during his work out and when the medics arrived, they were unable to revive him.

In an instant, Caroline's life had taken a very nasty twist for the worst. John had been self employed, which meant that the regular income flow came to a sudden and abrupt end. Fortunately, she did have signing powers on the joint bank account which they were using to receive John's income and to pay for various fixed expenses such as the mortgage and repayments for his car, as well as covering all the credit card costs. However, John had 'kindly' sheltered Caroline from all the tedious day to day running of the accounts, so she had no idea what was happening and how they were managing financially. The horror was about to start.

The first thing she had found out was that although they had been living well month by month, very little was being put aside for their future. She then discovered that although John had life insurance, this was only enough to cover the mortgage repayments for the next twelve months and not a cent more. However, this 'breather' was immediately halved as some of it was required for the repayments on his car which were as much as the mortgage payments. She would have to sell that car fast in order to avoid it being repossessed and she would still owe a large amount to the finance company.

Another shock was awaiting her, as - unknown to Caroline - they were currently in dispute with the local council over an erroneous electricity bill. The bill was twenty times their usual monthly amount and the dispute had been running for the last six months. The amount was almost the equivalent of half the mortgage and would now prevent her from even selling the house without getting that invoice paid and disputed afterwards. She just did not have that sort of money so was now caught in a chicken and egg situation: she did not have the money to pay the account and could not sell the house until she had paid the account.

As life would have it the family was also in the middle of renovations, so the house looked at its worse when tragedy struck. This meant that selling it was going to be much more difficult and she had a choice of either selling it at a discounted rate, or finding a way to pay for the rest of the renovations.

Caroline had dedicated her life to raising her children and providing a wonderful home for her husband. Although her children had fortunately flown the coop now, she was now a 50 year old widow with no formal qualifications and no work experience. She had always assumed that her role would never change, so she had no idea what she was going to do for a living in an economic times that makes it difficult for even well qualified individuals to find reasonable employment?

She soon found that statement "when times are hard friends are few" to be a harsh reality as the last time she saw most of their 'friends' was at the funeral. While the 'friends' seem to have lost her contact details, creditors on the other hand seem to know exactly where to find her and hound her for every last cent that they can squeeze out of her! To further add to her difficulties she has found that John left no will and she is having real problems finding any documents to support her attempts are restoring some sort of order in her life. Her medical plan has lapsed and her health is being affected by the stress of trying to survive in a friendless world.

The above is based on a real individual who has been put into the unthinkable position. Death seldom comes with a warning, and the scenario described can snowball so quickly without proper planning. So the question that needs to be asked is how much of this could have been avoided through an estate planning exercise with a trusted financial planner and his/her associates?

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