Time is money

When a spouse has died, financial decisions are the last thing you want to make but that's when it's most important to pay atten

When a spouse has died, financial decisions are the last thing you want to make but that's when it's most important to pay atten

July 26, 2002|by KEVIN CLAPP

A loved husband or wife has died. Mourning has just begun, when time stands still and the ache of loss cuts deep.

During this time of grief, the last thing on Earth you want to do is face questions about money, finances and the future, especially if the departed spouse took care of everything financial.

But soon, decisions must be made, plans evaluated. Whether you like it or not, you're the one who will need to address them.


Let's say you steered clear of financial decision making. The prospect of becoming active now, when you're emotionally raw from the loss of a spouse, can be daunting.

And among local financial planners, it is a situation they see all too often with widows of a by-gone era when traditional gender roles kept them out of the fiscal loop.

Spurred by a personal trauma, a Hagerstown financial planner decided to do something to help people carry on after loss.

To shed light on what can be a scary situation for widows, Scott Ford, president of Cornerstone Advisers in Hagerstown, maps out six areas requiring attention in "The Widow's Wealth Map: Six Steps to Beginning Again" (2002).

The book originated from an experience Ford had when his son, born in August 1995, was an infant. The baby was diagnosed with patent ductus arteriosus, a condition where a temporary artery connecting the main arteries of a baby's heart while in the womb does not close after birth.

"It was one of those heart-wrenching, gut-checking moments. If my son at six months old is on (an operating) table, we really don't know how long we'll be here."

So he decided to write a book that focuses on one of six pillars of a balanced life: spiritual, family, health, career, philanthropy and finances.

The financial realm is where Ford hopes the book will help others; proceeds will go to charity.

Insufficient experience

"The dilemma I see is, typically the males have handled the finances on the investment side of things, the estate planning side of things," Ford, president of Cornerstone Advisers, says. "(Women) may have handled the check writing, bill paying, but didn't participate in the investment side of things and it wasn't usually communicated very well to them."

But the climate is changing, says Chambersburg, Pa., financial professional Charles Schlichter.

Not handling financial decisions is a generational problem likely to dissipate over time because with younger couples, both spouses work, have their own retirement plans and each possess at least a working knowledge of finances and investments.

"It's very rare these days when I deal with only half of a married couple where it's something that impacts both of them," Schlichter says.

When he entered the business in 1969, Schlichter estimates that 90 percent of the time he dealt with one-income families. These days, the paradigm has reversed, with 90 percent of his clients relying on two paychecks.

As a result, both spouses are aware of money matters.

"You still generally find a dominant spouse to some extent," he says, "But now it might be 60-40 instead of 99-1."

Schlichter works with many older clients who had worked with his uncle and father before him. Processing 20 to 40 death claims each year, he says it isn't unusual to see widows haven't followed the money until they are suddenly thrust into the situation.

Often, widows prefer it that way.

"In that generation, usually the ladies didn't work and weren't as familiar with those things," Ford says. "And the struggle is a lot of them still don't want to be involved in those things, but they're in a position where they have to be."

Take it in stages

As a result, Ford has fashioned a three-stage process he follows with widows to manage money matters:

Vision stage - The first step, taken within a few months of a spouse's death, is a meeting to determine what goals the widow has. Simultaneously, care is taken to make sure immediate bills are paid for.

"The first rule is don't make a real quick irreversible decision," Schlichter says.

"It's very easy to make emotional decisions no matter who you are," Ford offers. "Those strong emotional decisions early may turn out to be the opposite of what you want."

For instance, a widow shouldn't decide to self a long-time home right away because down the line she may miss having the warm memories the home could spur.

Implementation stage - After waiting a few months to allow the widow to mourn, Ford says he sits down with her again to put a vision plan in motion.

"It's so important to set up new goals and dreams, and beginning again and having a reason to live and reason to grow," he says. "One of the reasons we have a six-month gap between meetings is because it's going to take a few months for them to figure out their goals and dreams."

Monitoring and review stage - Every six months or year thereafter, Ford recommends revisiting the plan, adjusting it as necessary.

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