Financial Survivorship Helping Friends and Family Move Forward Financially after the Loss of a Loved One

Transcription

1 Financial Survivorship Helping Friends and Family Move Forward Financially after the Loss of a Loved One Chip Simon, CFP csimon@hvc.rr.com Overview Your Personal Financial Passages Your Money Personality Secrets of Financial Independence Financial Survivorship Caring for Distant Parents

2 Overview Today s Presentation So what s the problem? What it means for your journey Benchmarking emotional progress Q & A You have a friend, parent, relative..they are hurting what can you do?

3 About Grief and Grieving Physical and emotional Has its own pace, but you can be sure that it will not keep up to daily life Time can heal Doors close, but new doors open Loved one can never be replaced Counseling is highly recommended How relevant? 50% of every relationship in this building 50% of all wives become widows < age 60 Between 35% and 48% of all college students have lost a family member or close friend within the last two years. Academic performance affected. 1 million women widowed each year Women likely to be dual inheritors

4 Overview of Financial Planning Achieve financial independence and manage financial uncertainty. Every survivor is at their own stage of a personal, emotional, and financial journey. How to identify and make progress towards personal interests. Make rational choices rather than emotional choices Financially, it is important to be aware of stage of emotional recovery. Your humanity counts how can you be a better friend? Benchmarking the Stages of Financial Survivorship Akin to Kübler-Ross 5 stages of grief (denial, anger, bargaining, depression, acceptance) Shock 0 to 5 months Hurt 5-12 months Repair months and beyond Progress I m ready to move on Each stage has financial implications from grief to grace

5 Shock DOD-6 months Highly disoriented, unable to concentrate, guilt, sleeplessness, tasks appear insurmountable **Still living with joint goals, some tacit, some conscious.** Financial issues abound yet they are least able to attend to details. Highly vulnerable. Avoid mistakes by attending to details. Set stage for next 12 months Create financial support team Avoid big transactions/decisions Shock DOD-6 months Why create a financial team? Cash flow projections Credit/debt/end of life expenses Filing for benefits IRA transfers/retitling/spousal rollovers Investment basis Tax planning for change in filing status Child care Money Personality under stress

6 How Property Transfers at Death By Common Law titling of accounts and deeds By Will direct bequests By Contract beneficiaries of IRA, insurance Since the spouse is usually selected to receive or inherit property controlled by these documents, many, if not all, need to be amended/changed. Hurt 5-12 months Fasten your seatbelts, it s going to be a bumpy ride. The world gets back to normal while the grief persists. Many firsts. Just get through it one day at a time.

7 Hurt 5-12 months Financial implications Liquidity, liquidity, liquidity. Help create adaptable lifestyle to live one day at a time work schedules, child care, basic needs, sleep and exercise. Support ability to perform at job and school Probate issues Repair months+ Complete first annual cycle Individual interests revealed; personal reconciliation with loss Is financial self-sufficiency on track? Complete memorials for final goodbyes Are they emotionally stuck? (Judy)

8 Repair months+ Financial Planning implications More able to attend to goals Move forward with investment/retirement plan Social Security reporting for kids Social Security deployment Memorial donations Progress I m ready Interests identified and choices made exclusive of relationship Staying Single? New relationships Pre-Nups Live together or not? Children Estate Issues

9 Typical Problems Education about finances Minor Role with financial responsibilities Prior sources of money Insufficient income potential human capital Financial Dysfunction Some Real Life examples What helped you the most, emotionally, during the first year or two? Financially, was there a big difference between being a single vs. being part of a couple? What is one piece of financial advice that you would give to help others prepare for or manage survivorship?

10 Observations The deceased spouse is very much alive use his or her name Reflect on your own experiences with loss. Survivorship and loss come in many forms (parents, employment, divorce, etc.) Connect with them The more organized and informed before a death, the easier it is after a death. Resources Moving Forward on Your Own: A Financial Guidebook for Widows By Kathleen M. Rehl, Ph.D., CFP

11 Resources Soaring Spirits International ( Resources Steve s List In Memory of Stephen W. Scammell Colgate Class of 1973

12 Class Dismissed Thank you for listening! Next week: Caring for Distant Parents