Connie got taken by a shyster after her husband died. The supposed "financial advisor" sold her inappropriate investments, while collecting over a quarter million dollars in commissions. How do you avoid this situation?
The statistics indicate that 75% of married women become widows. This seems logical since women live longer than men by about seven years and women tend to marry older men. The unbelievable statistic is that the average age that a woman becomes a widow is 57.
Losing a husband creates emotional turmoil for a wife. Suddenly, every aspect of her life changes. In general, her past responsibilities double. She is the only parent for their children. She becomes solely responsible for the house upkeep, the car’s maintenance, and everything else that needs to be done. Life can quickly become overwhelming. Add to all that: She is also solely responsible for the family finances.
The Shyster StrikesShortly after her husband died, Connie received the proceeds from life insurance policies, liquidation of business interests, and other sources. Connie wanted to make good decisions, but emotionally she was drained, she was distracted by the needs of her children, and was struggling to get her own life into a normal routine. During this vulnerable time, she was convinced by an advisor that her husband was a dear friend and because of that relationship, he would be there to help her make all these money decisions.
The family finances had always been managed by her husband. The thought of even attempting to understand her financial situation was causing great anxiety. She became convinced that decisions had to be made now or investment opportunities would be missed. Connie accepted the shyster’s advice.
For at least six months or longer, many widows feel they exist with a “foggy state of mind” and, consequently, decision making is impaired. Unfortunately, this is generally not recognized for at least a year or more. Reflecting back on her decisions, Connie wonders, "Why did I agree to that?"
This Can Be AvoidedAll this can be avoided. Before tragedy strikes, married couples need to seek out and develop a relationship with a trusted advisor. Together, the spouses go through the financial planning process with a qualified financial planner and, as a result, a well thought-out plan is put into place. This plan will then be available to the surviving spouse and can eliminate any anxiety regarding financial matters.
The financial advisor will be there to assist with the transition of assets; the securing of survivor benefits; the rolling over retirement accounts; as well as continuing the plan that was created with the input of both spouses. Going through this process will allow the surviving spouse to refer to the trusted advisor when presented with "opportunities" by others who may turn out to be shysters.
Take Action NowI often get the comment from husbands that "I want my wife to come to you if something happens to me". While this strategy is doable, it is not ideal. With no prior planning in place, the advisor is required to work with the surviving spouse to first gather and organize all the financial information and only then begin the work to determine the strategy that accomplishes the family goals. This can take time and may get off track due to the emotional state of the surviving spouse. If the planning has already been done with both spouses participating, all that the advisor needs to do is implement the agreeable upon strategies. The important actions can be completed in a more timely and efficient manner.
And, by the way, the 25% of husbands who outlive their wives also go through a period of adjustment and, likewise, need to be careful about making major decisions too quickly. Even though men are less likely to be approached by "well-meaning" advisors, having a plan in place eliminates the need to focus on financial decisions during this stressful time.