Good Grief
The husband who has overseen the couple’s retirement investments for years dies…..What should the widow do now?
The question is an uncomfortable mix of the grim and the ludicrous, I know. And yet, sadly, it closely resembles a real-life quandary widows must all too often face. The husband who has overseen the couple’s retirement investments for years dies…..What should the widow do now? Let the investment portfolio run off the road, hit an embankment, turn end over end, crash into a pine tree, explode and burn?
It makes sense that a grieving widow should not within a year remarry, move to another state, or disinherit the son who made an uncharacteristically insensitive comment at the funeral. But for her to do nothing as her investments suffer destruction does not. Trust me, divorcing, moving back to good ole Louisiana, rewriting a will – these are all remedies more easily accomplished than rebuilding a wrecked investment portfolio.
I repeat my earlier question: What should the grieving widow do?
Answer: Something.
Something that will put on the brakes.
Something that will allow her when she is finally herself again to take on the responsibility of steering - likely using simpler methods than her deceased husband.
Something that will prevent possible disaster meanwhile.
Long experience tells me there is no single solution. To state the obvious, every person is different.
One grieving lady will calmly take the wheel and say, “Now how do we do this? I need some expert support here.”
Another will put her face in her hands and cry, “Why is this happening to me?”
The sad answer to this second lady’s question is that the financial professional in the picture did not adequately guide and prepare her and her husband.
In recent years, widows have come to me unable to hold back tears, and for good reason: since their husbands’ deaths they’d lost 50% of their assets. (In one case, considerably more.) Clearly, greater market risk, especially in our volatile world of today, suggests greater and more immediate action be taken to put on the brakes.
On the other hand, some portfolios consist of cash, certificates of deposit, or fixed and indexed annuities. These don’t involve the substantial market risk of securities such as stocks and bonds and mutual funds. Portfolios without market risk are in no danger of a stock and bond “wreck”. Nevertheless, any and every investment includes risk of some sort and therefore requires attention.
Be aware, the deceased husband’s broker may be inclined to advise no action for the surviving widow or widower. You can probably guess why. But “no action” does not mean the result for the investments will be “no change”. Investments have a life of their own - and possible death. They change with or without an investor’s involvement. Will the same broker who failed to prepare the couple for the possibility of the husband predeceasing the wife also allow the widow’s portfolio to go careening off the road?
The new widow must be extraordinarily careful as to whom she goes for help with investments at this critical stage of life. The natural tendency is to stick with the familiar; if not with the existing broker then with some other professional in the deceased husband’s circle of advisors.
For example, a grieving widow is usually in contact with an attorney during the succession (probate) process and too often expects that attorney to be a reliable source of investment advice. My friends and clients who are attorneys would, I believe, quickly and vehemently object to this common misconception that they are or should be investment experts. Going to an attorney for investment guidance makes no more sense than going to a doctor for legal guidance. The typical attorney’s (and C.P.A.’s, too, for that matter) well-intentioned advice will be to change nothing. As non-specialists, they simply do not know better. Having given you this simplistic advice, they aren’t forced to disappoint your too high expectations of them.
By the way, with proper planning, probate may be eliminated for many if not all assets.
By the way, with proper planning, probate may be eliminated for many if not all assets. One measure of the effectiveness of both the attorney and the investment professional is whether this cost saving and privacy preservation measure was accomplished for the husband’s death. If not…well, that’s to be considered.
Over the years, I have for different grieving widows recommended greatly varying strategies: changing little, changing everything, and a range of possibilities in between. To accommodate the process, I’ve even at times referred widows (and widowers) to experienced grief counselors. We are blessed with excellent ones in the ArkLaTex. These loving people can help those paralyzed by fear to reach a more calm state of mind, even as they still grieve, so that urgent and vitally important decisions can be made.
In summary, while there is no single and common investment solution for everyone in grief, there is a best solution for anyone. It can be found. Comfort is available. Catastrophe can be prevented. To that end, however, there will be a need for some decision, some action, some change.
For simple answers to the five basic questions on investment management in a time of grief, send a request for your free booklet to Ernie McDaniel, 2001 East 70th, Suite 407, Shreveport, LA 71106, or emailing ernie@mcdanielfinancial.net, or calling 318-798-9022. This helpful information, for yourself or to be passed along to a loved one, will be sent immediately. Ernie McDaniel is a Chartered Financial Consultant and President of McDaniel Financial.
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