06/08/2012 03:39 pm ET Updated Aug 08, 2012

The Financial Aftermath of Military Loss: Helping Families Build a 'New Normal'

After Carole Hilton's Navy husband died suddenly, the widowed mother of three had to make a number of financial decisions immediately, while she was preparing to bury her husband. As she details in a recent podcast, she worried she might make a mistake that would hurt her family's future and jeopardize their financial security. While the military provided a death gratuity for immediate expenses, there were other benefits decisions to make and a life insurance policy to deal with too.

Thankfully, Hilton got good financial planning advice and made smart choices, but many families of our fallen service members face financial decisions and challenges following the deaths of their loved ones.

Military pay is cut off following a death. The bank account the family had in place for paying its bills and day-to-day expenses quickly runs dry. The provision of a death benefit by the military helps families cover immediate expenses, but a new financial management system must be put in place by the surviving spouse to address the household's needs immediately.

In about 45 percent of military losses, service members are not married and do not leave behind a spouse with children. Surviving parents must cope with closing bank accounts for their deceased child and manage the financial matters left behind.

While there is the Servicemember's Group Life Insurance, an affordable policy available to military members for the beneficiaries they designate, the money brings its own heartache. When the life insurance funds were distributed by check, my fellow widows and I would talk about how reluctant we were to deposit the money in the bank. Depositing it meant accepting that our husbands were gone and never coming home. I would have given anything to see my husband, Tom, come walking through the door. But of course, he couldn't come back. He died in a military plane crash in 1992. And I was left with the condolences of friends and family who meant well and loved me.

And then there was that check. That life insurance check sat for weeks on my bedroom dresser following my husband's death. My experience with guilt over receiving a large sum of money after my husband's death was not uncommon. The other military widows I talked to after my husband was killed did similar things. We were unsure what to do with the money, and accepting the funds by putting them in the bank felt so final. Like Hilton, we worried we would make mistakes in managing the money left to us. Eventually, a friend convinced me to take the check to the bank and deposit it.

Now, when I talk with surviving parents or widows who have received a life insurance benefit following the death of a service member, I hear similar stories about guilt over accessing what some call "blood money." Death gratuity and life insurance benefits today for military survivors are usually electronically wired to an account, so Servicemembers Group Life Insurance checks today don't often sit on bedroom dressers. But the same reluctance and inner turmoil among survivors to touch the funds remains.

For some, the money becomes its own stressor related to the death of the service member. I have seen many parents refuse to access or even think about the money for weeks or years, leaving it untouched in an account. Sometimes families are approached by others claiming to have known their loved one and want access to the money, or scam artists target them because military death benefits are common knowledge.

Regardless of who died, or who in the family received the benefits and life insurance money, all survivors who have lost a loved one are forced to reconcile the conflicting emotions that can arise from receiving -- or not receiving -- any amount of money from the government upon the death of a service member, and they must grapple with the financial implications that a sudden death brings to all survivors.

While typically only one or two adults in a given family are financial beneficiaries of life insurance and government benefits following the death of a service member, the ripple effect of loss is much broader. At least 10 people are significantly impacted by each death of a service member. There are spouses and children, mothers and fathers, brothers and sisters, aunts and uncles, and a host of blended family members and relatives affected by the loss.

In more than 80 percent of military losses, deaths are sudden and unexpected, catching family members unaware and leaving them in shock and grief. These deaths are often violent and leave families struggling to cope with the nature of the death as well as the public attention that a death in service to country can bring.

Survivors may need to assist other family members coping with the death, help plan the funeral, and respond to a stream of requests from the media, the public, and the community related to the loss. The loss can be so overwhelming that it eclipses other parts of life, and survivors can easily find themselves dealing with serious financial issues following a death because their attention has been so radically jolted to other parts of their lives. Earning a living and financial management can easily take a backseat.

Survivors may struggle to concentrate and perform well on the job when returning to work following the death of a loved one who served in the military. Their coworkers and supervisors may tiptoe around them in the workplace, unsure of how to treat them following a public loss that others are uncomfortable discussing. In some cases, survivors have seen their work evaluations suffer following a death, needed to request time off without pay, had to undergo psychological or professional bereavement counseling related to the death that prevented them from working full time, or had their employment terminated.

Adult siblings may be enrolled in college or vocational training at the time of their brother's or sister's death. A traumatic loss may mean that the surviving sibling may struggle to concentrate and complete coursework, retain employment, or feel the need to support other family members during a difficult transition.

All of these situations can bring financial challenges, especially when survivors have no financial cushion to fall back on. The financial implications of coping with grief and loss can last for years. On average, it takes five to seven years for survivors to reach a "new normal" following the traumatic death of a loved one. But it can be a tough road.

Every week, our casework assistance office receives requests for financial assistance from military survivors grieving the death of a loved one. There are parents needing money to fix a hole in the roof because one of them had to stop working because they needed bereavement care following the death and they can't afford it. There's a sibling who needs help jumpstarting a college education that derailed when a brother was killed in action. There's a widow contemplating a house purchase who is trying to understand the benefits she's paid, the tax implications, and how to budget so the benefits and resources left by her husband will sustain her and their children for the long term.

To address these financial education needs, the Tragedy Assistance Program for Survivors (TAPS) has partnered with Citi in the CredAbility ReConnect program. The program will help grieving military families transition and rebuild their lives in the "new normal" in the years following the death of their loved one. It also offers resources to help returning veterans and families of those who are currently deployed with organization partners Iraq Afghanistan Veterans of America and the Military Spouse Corporate Career Network.

Military survivors, regardless of relationship to the deceased or circumstances of death, will now have a place to go for advice and information on debt management, loans, budgeting help, foreclosure prevention, home purchasing, and more. The CredAbility ReConnect program offers free online counseling as well as a 24/7 toll-free number that connects military survivors with expert financial counselors.

A website offers courses in financial education that take about 15-20 minutes each. The lessons have topics like "Understanding Military Benefits and "Surviving on a Tight Budget." They are very straightforward and full of useful information that is helpful for survivors.

By collaborating with TAPS, IAVA, and MSCCN, CredAbility and Citi, through both Citi Community Development and Citi Salutes, have stepped up to meet the challenge of creating resources to address financial education issues for veterans, their families, and their survivors. And for that, we salute them. It's assuring to know that going forward, our military survivors will have these resources to help them rebuild their lives.