Over the past couple of months, I have been helping my mother sort through her financial affairs after the death of her spouse. Since my dad passed in March, it has been a steady stream of questions, conference calls with her financial advisor and one critical decision after another. Of course, this doesn’t even scratch the surface of the emotional stress and strain on the family. Thankfully, my parents had prepared. Wills were drafted years ago and recently reviewed with their attorney – in a meeting I attended, beneficiary forms were current, and long-term care policies were in place. Decisions about cremation, down to the vessel where the ashes would live, were made a decade earlier. Yet despite all this planning, despite their son being a CFP® with 25 years of experience in the financial services industry, it was still a slog.
Safety Net
As a knowledgeable professional, I explained to my mom how a spousal rollover worked with the IRA accounts. I also inquired with my father’s financial advisor about life insurance policies. Other issues included questions like were my mom’s investment accounts appropriately allocated? How does Social Security work after the death of a spouse? What items were covered by Medicaid and the long-term care policy? What about my dad’s pension? Joint checking accounts? The final joint tax return? On and on and on. We are on the three-month anniversary of my dad’s passing, and we are in good shape financially. We have a village of helpers, a tight-knit family, and broad skillsets to coordinate the details. Not everyone has such a safety net.
An Overheard Situation
About a month after my dad died, my teenage son and I went to the local bank to open a checking/savings account for him. He needed a debit card and direct deposit account for his new lifeguard job. As we sat in the little cubicle with the banker clicking away on her computer, I spotted an older woman clutching a handful of papers. I watched her sit down with another banker at a neighboring cubicle, and I could hear their conversation over the wall. Her first words were, “My husband died a few months ago, and I don’t know what to do.” The banker began a series of probing questions, but I could not help but feel a sense of dismay for the widow. Evidently, she was alone with little guidance.
How in the world could anyone manage such a daunting task by themselves? If you have no close friends, relatives, or advocates to lean on, I cannot fathom the sickening feeling of helplessness. I mentioned what I had overheard to the lady assisting my son and me. She said it is remarkable how many people come into the bank after the death of a spouse who has: never written a check, never done any planning, and has no idea where to turn. I thought of my mom’s situation. While almost everything was in order, we still had a gauntlet to run.
Preparedness
Please, for the sake of your beneficiaries, get your financial affairs in order. It is never too early to start, and it is the responsible thing to do. Also, try to learn the basics of general banking, investing, and financial services. And be sure to work with trusted and knowledgeable financial and tax advisors. Even a CFP® like me appreciated the professional handholding while my world was trembling.
By Andy Ives, CFP®, AIF®
IRA Analyst
