4)Consider cash flow and the immediate need for cash
having sufficient cash flow during this transitional period
is crucial for your client. For example, they should be aware
of what money is coming in and what money is going out.
They should use funds from investments that will not create
a taxable event and ones that do not carry a penalty for
5)Consult with health care and other insurance professionals
Your client needs to secure important documents, including
birth certificates and marriage license, as well as military
and company benefit papers. Filing claims with social
security as well as life insurance companies should be done
immediately. (I typically recommend taking the lump sum
option versus a payout option, as it provides many additional advantages. with a lump sum, the proceeds can be
invested to produce an income and if the client dies, the
funds will pass on to their beneficiaries.) Their spouse’s
401(k) or Iras can be rolled over into their own Ira. They
will also want to contact the human resources department
of their spouse’s employer (if the spouse was working at the
time of death) regarding unpaid salary and vacation pay, as
well as life insurance policies. They will also want to draw
their spouse’s pension or roll the funds over into their Ira.
6) Collect benefits a review of your client’s medical insurance coverage,
including their families (especially if covered under their
spouse), is critical. how long can they stay on the plan?
and if children are covered, to what age can they stay on?
They should review the cost for these benefits so they can
compare with other available coverages.
7) Review assets and liabilities Your client’s net worth equals what they own minus
what they owe. It is important they know these numbers,
which will help them understand their limitations. This is
a snapshot of their financial life to use for their goals going
forward. assets include cash and cash-like products that are
liquid or can be converted to cash in an instant.
• Retirement Assets: Iras, 401(k), 403b, 401a (this
depends on where they or their spouse worked). annuities,
vested pensions and other tax-deferred investments.
• Personal Assets: home, vacation home, furnishings,
art, jewelry, antiques, boats, recreational vehicles, etc.
• Other Assets: Investments could include individual
stocks, government and corporate bonds, mutual funds
that own stocks and bonds, and real estate properties.
• Liabilities: what they owe on credit cards, auto loans,
mortgages, education loans and other debts.
Their assets minus their liabilities equals their net worth.
The analysis allows them to realize and understand what
they can and cannot do regarding finances. Steven P. Azoury, CLU, ChFC, is owner of
Azoury Financial in Troy, Michigan.
8) Estate settlement Your client should start their estate settlement as
soon as possible. This includes changing the title and beneficiaries on cars, insurance policies and investments. They
should hold off on credit cards so they can have them available until things are settled. I would advise them to delay
closing or changing bank accounts. This will give them the
ability to deposit any incoming payments to their spouse
until things are cleared up. also, they should discuss with
their tax preparer when an estate tax return or final return
needs to be filed.
9) Don’t get run down It is important that your client continue to take
care of him or herself so they can fight through and make
rational decisions. advise them to get their rest and exercise. as always, they need to stay in touch with their family
and friends, and consider joining a support group or talking
to a counselor. This will help when they feel frightened and
10) Postpone major decisions There is no need for your client to rush when
making big decisions. as the grieving process continues,
they may be vulnerable and mistakes can be made. Their
life is different now and their mental and emotional feelings
will develop as they rearrange their priorities. People that
are well-meaning, such as friends/family who do not know
their situation, will make recommendations as to what to
do now. Your client should seek trusted professionals to
assist with the financial decisions in order to avoid errors.
however, they should be careful, as some view widows/
widowers as easy targets to take advantage of financially.
Your client should move slowly on life-changing events so
they have time to heal.
11)Focus on new goals after a period of mourning, your client should
start fresh by setting new goals in life. This could begin
with a new financial plan. They also need to schedule a
meeting with their attorney to update their will and estate
plan. writing a letter to their family about their values and
what they would like the family to accomplish in the event
something would happen to them may make this process
easier. expanding their social circles to include people who
will know them as themselves and not just as “someone’s
spouse” may also help with the healing process. It’s important to note that your client be careful about dating too
soon and always keep their finances to themselves.
remember there is life after the grief subsides, and they
will be able to continue on and create many more new
memories in their life. RA