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, CFP^Ò

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