Why didn't Martin Luther provide for his family to be taken care of after his death? I recently heard Professor Stephen Nichols of Reformed Theological Seminary state that following Martin Luther's death, his wife, Katie, and his children struggled financially for some time.

Did Luther simply neglect to provide for the care of his family? Did he make some provision which was later misappropriated? Was there no church to care for his survivors?
I always find these questions about Luther interesting because the more I follow a questions about Luther, which are often curiously raised, the more impressed I am in his admirable character. Basically there is no story here, other than that Luther was a humble and responsible person who left all he had faithfully to his wife. 


  Luther’s income was very small, even for the standard of his times, and presents a striking contrast to the royal splendor and luxury of bishops and cardinals. (Schaff, P., &amp; Schaff, D. S. (1910). History of the Christian church (Vol. 7, p. 470). New York: Charles Scribner’s Sons.)


Although a humble minister who had few sources of income, he was diligent with what little he had and managed to earn and seems to have invested it all into his family:


  He bought in 1540 from his brother-in-law a little farm, Zulsdorf, between Leipzig and Borna, for six hundred and ten guilders, as a home for his family. His wife cultivated a little garden with fruit-trees, even mulberry and fig trees, raised hops and brewed beer for domestic use, as was then the custom. She also had a small fish-pond. She enjoyed hard work. Luther assisted her in gardening and fishing. In 1541 he purchased a small house near the convent, for his wife. He willed all his property, which amounted to about nine thousand guilders, to his wife during her lifetime, wishing that “she should not receive from her children, but the children from her; that they must honor and obey her, as God has commanded.”
  His widow survived him seven years, and suffered from poverty and affliction. The Elector, the Counts of Mansfeld, and the King of Denmark added small sums to her income; but the unfortunate issue of the Smalkaldian war (1547) disturbed her peace, and drove her from Wittenberg. She returned after the war. Melanchthon and Bugenhagen did for her what they could. When the pestilence broke out at Wittenberg in 1552, and the university was moved to Torgau, she followed with her children; but on the journey she was thrown from the wagon into a ditch, and contracted a cold which soon passed into consumption. She died Dec. 20, 1552, at Torgau; her last prayer was for her children and the Lutheran Church.( Schaff, P., &amp; Schaff, D. S. (1910). History of the Christian church (Vol. 7, pp. 471–472). New York: Charles Scribner’s Sons.)


Compared to the poverty of some who survive their husbands (we must remember that the husband's salary was the source of income) it does not actually sound that bad. Aside from a local war between Catholics and Protestant powers that seems to have aggravated otherwise fairly manageable conditions, his wife did OK and did not seem to need the support of her children. Simply speaking, Luther left what he had to his loved one, but was not a rich man. I suppose many prophets and Apostles left less for their wives than Luther but judging a man for his wealth seems inadvisable, as their whole ambition was concerning the world hereafter and so did not accumulate much in this life.