Skip to main content

Sound Advice: May 3, 2023

Spouses Need To Talk To Each Other

Far too often, I’ve met with recently widowed prospects who never had essential discussions with their spouses about the financial aspects of their lives. More often than not, it appears that there was an assumption that some sort of magic would ensure that there would be no concerns about money after that sad day.  The reality, however, is very much the opposite.

This is largely the result of what used to be the view that the husband took care of the finances and the wife took care of the home.  To the extent that this “used to be” scenario continues, it’s a virtual time bomb that will cause considerable problems.   Let’s not even talk about the husband who never bothered to give his wife the combination to the vault in their home.

At a minimum, both spouses need to know about the full range of assets (including investments, real property, and personal property) and debts as well as sources of continuing income.  Equally important would be a reasonably accurate expense budget.  The latter should include a detailed list of all ongoing commitments such as subscriptions and charity.

Let’s not forget the location of the spouse’s wills and the name(s) of the attorney(s) who prepared them as well as life insurance policies, if any, and the name(s) of the agent(s) who sold them. Then there are the names of the family attorney and accountant.

That’s a start.  Assuming proper preparation has been made on the above items, one important forward-looking concern will be the need to find an adviser to help with investments.  This may be the continuation of a longstanding relationship with a trusted existing adviser or the search for someone new.

The latter will be tricky.  As a rule of thumb, please ignore the banks, major brokerage houses, and insurance brokers.  Banks are rarely repositories of investment excellence.  Major brokerage houses emphasize selling whatever is on their recommended lists.  And insurance brokers would be pleased to have you believe that insurance is the solution for everything.  It most assuredly is not.

Competent advisers usually have one or more of the following sets of letters after their names: CFP (Certified Financial Planner) or CFA (Chartered Financial Analyst), which may be accompanied by CPA (Certified Public Accountant).  There are loads of other letter combinations, nearly all of which are of little meaning.

In addition to credentials, there’s the matter of chemistry.  People would be best advised to meet several qualified advisers to find those with whom they are most comfortable.

Far better than: What do I do now?

N. Russell Wayne, CFPÒ

Any questions?  Please contact me at nrwayne@soundasset.com


Comments

Post a Comment

Popular posts from this blog

Sound Advice: February 21, 2024

800-000-0000 That’s 800-000-0000 Again, 800-000-0000 That’s the typical closing for the hard sell commercials that are increasingly polluting media airwaves.   These are the commercials for products or services you rarely need or most definitely should avoid. A substantial number are on behalf of groups of attorneys who would have you believe that you and many others may be entitled to cash compensation for having used or being exposed to some evil item or substance some time in the last few decades.   The pitch always includes a comment that there’s no cost to you unless there is a settlement in your favor. Much of this is rubbish, but when the appeal suggests that there’s nothing to lose, why not take a shot.   And, as you would expect, “advisors” are standing by 24/7 to take your call and help get the process in motion.   What kind of advisor would be available at 3 a.m.? One version of this approach pops up every year between October 15 th and Decemb...
Post a Comment
Read more

Sound Advice: September 21, 2022

The Professional Approach To Stock Selection There are various approaches to stock selection, but the two that predominate are fundamental analysis and technical analysis.  Fundamental analysis is a numbers-based method that evaluates key factors such as income and financial health, including the past, present, and future.  Technical analysis emphasizes movements and formations of stock prices. Fundamental analysis is based on factors that over time have proved to have a meaningful impact on stock price movements.  The optimal picture of corporate profitability is steady growth, both in the past and, prospectively, in the coming years.  Steady growth is rewarded by higher valuations of underlying earning power than those accorded companies with erratic progress. When professionals screen (filter) the data of the broad universe of stocks, they look for companies that move ahead every year, regardless of the prevailing economic conditions.  Although high pas...
Post a Comment
Read more

Sound Advice: July 26, 2023

Is Day Trading a Good Idea? Day trading can be both exciting and potentially profitable, but it also comes with significant risks and challenges. Whether it's a good idea depends on several factors, including your financial situation, risk tolerance, time commitment, and knowledge of the markets. Here are some considerations to keep in mind: Risk and volatility: Day trading involves buying and selling securities within a short time frame, often within the same day. This exposes you to the inherent volatility and risks of the market. Prices can fluctuate rapidly, and unexpected events can have a significant impact on stock prices, making it challenging to consistently make profits. Time commitment: Day trading requires a substantial time commitment. It involves closely monitoring market movements, conducting research, and executing trades. It can be stressful and demanding, as you need to be actively engaged in the market during t...
Post a Comment
Read more