Advance Financial Planning Protects You From Making Poor Decisions During Times of Grief

December 10, 2013 § Leave a comment

The loss of a spouse or other important person in your life is a time for grief and reflection. It is definitely not a time to make major decisions, financial or otherwise.

“People are usually in shock for six months to a year. They don’t think straight or fathom what’s happening during that time,” says Dr. Loretto J. Maldonado, PhD PA, a clinical psychologist and grief counselor based in the Palm Beaches area. “Everything changes – your routine, your friends, sometimes even where you live. You are vulnerable and alone, and you don’t know who to trust.”

From the wealthy residents of gated communities such as Boca West, Admirals Cove, BallenIsles, Mirasol, Bear’s Club, Ibis, Old Palm, Old Marsh, Frenchman’s Creek, and Frenchman’s Reserve, a very large amount of assets often change hands at these times.  Managing that wealth can add extra stress, especially if children from prior marriages are involved. Proper financial planning is the key to avoiding additional stress and conflict with interested parties.

At times of grief you are at your most vulnerable, and scam artists know that. Some lowlifes actually read the obituary pages and then call widows and widowers and try to sell them an investment or some other deal. Unfortunately many such schemes and cons are very successful.

At these times it’s also important to deal logically with family members who want to help with financial matters, well-meaning or not. Sympathy does not substitute for professional experience. According to Maldonado, “When other family members give you financial advice it can be confusing and misleading.”

Widows are especially vulnerable, because very often the deceased husband handled all the finances. “There are many women whose husbands have not prepared them for financial concerns, especially among second marriages,” Maldonado says. “I see a lot of women come to therapy because they spent their personal assets when they were married and now the children from a previous marriage are taking over everything.”

The best way to deal with this difficult time in life is to prepare for it, so that you are not faced with as many difficult decisions. Here are some steps to take before you find yourself on your own:

Communicate about finances

Both spouses should know where all the financial paperwork is located and should understand every account as well as wills, trusts, mortgages and insurance documents.

Agree on a plan

Discuss and then put in writing (not just in a will) your intentions regarding money after either spouse is gone. Which assets should go to children or other family members, and which assets will remain with the surviving spouse?

Secure the plan

Set up a trust ahead of time and take other steps to ensure that your spouse’s wishes will be carried out.

Work with a wealth manager

“You need a financial planner who talks not just about investing, but about your life situation,” Maldonado says. “Work now with a financial planner who will deal with the human factor as well as the financial issues during a time of crisis.”

Curtis Lyman, a HighTower partner and registered financial advisor in Palm Beach Gardens, Florida who is also a licensed attorney and former trust company founder and president, believes that having an experienced financial advisor on your side before a crisis strikes is of great benefit. The advisor can plan ahead for the situation, is not going through this emotional stress and is therefore thinking clearly on your behalf.

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