INTRODUCTION

October 7, 2011- If you have recently experienced the death of a spouse, this is written for you. As most surviving spouses are women, we focus on widows, although widowers may find value in this information, as well.

When you lose a spouse, you may find yourself thrust into an administrative role at a time when you feel least capable of taking it on. Ideally, you should be able to grieve in your own time and in your own way, without the pressure of becoming a probate, tax, legal, and financial expert. While you may have the ability to perform these functions, you may prefer not to. And if, as in some marriages, your husband took the lead role financially, you may not be fully up to speed on all the financial, investment, tax, insurance, and estate planning issues ahead of you.

This may be the time in your life when you experience the greatest need, the least capacity to address your needs, the most vulnerability, and the competing requirement to be both trusting and guarded at the same time. You may have more to do than you ever imagined. It may be difficult for you to know what to do, what not to do, how to decide what is important, and how to decide what is not. It may be just as difficult to know what tasks to delegate, whom to ask for help, and whom to trust. Trying to make decisions may be like looking through cloudy goggles because of your emotional strain and the sheer volume of tasks that lie ahead. You may find it difficult to see clearly for a long time.

Our goal here is to help you develop an effective approach to managing the tasks ahead, navigate the landscape of opinions and advice you’ll receive, and make smart decisions about your money. It is not to provide you with a comprehensive list of the legal and financial tasks you will need to complete. Many resources are available to help you catalog these things. Rather, we deal with the process you will need to have in place to gain command of your financial resources, which, we believe, will support your emotional recovery.

We have asked surviving spouses and those who support them about the challenges they face. We conducted these interviews to get a complete and deep understanding of the path you will need to travel to gain command of your financial resources, to head toward emotional recovery, and to build the life you wish to lead.

A word about you compared to the “average” widow. While several common themes emerged in our interviews, it was clear that there are no averages, no right or wrong ways to come to terms with the death of a loved one and the administrative work that lies ahead, and no schedule that can be applied to your situation. Consequently, there are no set formulas for addressing your challenges. While we will address common problems and solutions that have proven helpful to others in similar situations, we maintain that your situation is unique.

And a thought about the word “widow.” We are reluctant to use the word at all. Many women we speak with tell us they were uncomfortable being called widows, the connotation being that widows are helpless little old ladies. You may not think of yourself as a widow. We use the term literally, understanding that you may be much too young and have too much to offer to consider yourself a “widow.”

THE CHALLENGE - PRIORITIES OF WIDOWS

According to those we interviewed, surviving spouses have a distinct set of priorities and financial challenges. While these differ greatly from person to person, there seems to be a clear pattern. How each challenge is handled can have a significant impact on your emotional recovery and the time it takes you to migrate toward a new life. Following are the short-term and long-term priorities of widows as told to us.

Short-Term Priorities

The first set of priorities includes tasks to be handled during the initial shock and confusion following your loss, when you may be engulfed in grief and fatigue:

• Get the help I need

• Arrange the funeral

• Make sure I have the cash I need to get through today

• Hire an attorney to open my husband’s estate

• Notify the appropriate people about the death

• Acknowledge those who provide help and express condolences after the death

• Not feel so out of control

• Not get “taken”

• Connect, guide, and grieve with my children

Long-Term Priorities

The second set of priorities becomes important, as the reality of your situation sets in, after some rest and reflection, and as those around you migrate back to their own routines:

• Understand what my financial assets are and where they are

• Close the estate and have enough understanding of probate and tax to effectively use professional relationships (attorney, accountant, financial planner)

• Take command of the fear, confusion, and un-coordinated conflicting advice I receive from friends, family, and professionals

• Establish professional relationships I will need

• Preserve what I have and know how long it will last

• Minimize taxes

• Make sure my children and/or grandchildren are taken care of

• Keep peace among my family members now and after I die (especially in blended families)

• Have a meaningful charitable impact to whatever extent I choose

• Protect myself from being “taken,” understanding that there are those who will try to take advantage of me

• Know what needs attention in what order so I can delay significant decisions until a later time

• Return to my profession

Finding Financial Advice You Can Trust

In almost every interview we conducted, we found that one of the most important priorities for widows was to find trusted advisors who could coordinate the many pieces of the puzzle required to move from what she and her husband had to a comprehensive plan for one person based on new and different priorities. These advisors take on many forms including an attorney, accountant, financial planner, and/or investment manager. Widows are looking for qualified, trusted, comprehensive resources to manage the entire process without the pressure of product sales. According to a survey by Boston Consulting Group[1], women want four things from advisors:

• Household administration – Help me with the day-to-day handling of my wealth.

• Financial Education – Teach me what I need to know to gain command of what I have to support my new life.

• Financial Advice – Give me your unbiased professional view of how I need to manage my financial resources.

• Children’s Solutions – Provide ideas and direction for how I can train, provide for, educate, and spend time with my children and grandchildren.

The process of finding the right advisors, especially during an emotionally grueling time, can be daunting. Later, we will provide some suggestions to help you approach this decision with confidence.

“I NEED YOUR HELP” PART 1 – ASSEMBLING YOUR SUPPORT NETWORK

The pastor of a large church gave us his perspective. His view is that his church takes seriously the scripture to “take care of the widows.” He said that if his church is doing its job, the widows in his church will have many of their needs met. He recognized that when a woman loses her husband, she depends heavily on those around her more than at any other time in her life.

The pastor explained that the first group of people around the widow are her family and close friends. Around them is the church family or other small community. In many situations, this pro-active support falls into place seamlessly. Many churches and community organizations have a team of volunteers ready to go into action when a death occurs. Volunteers are sometimes those who have experienced a loss themselves and know just what kind of support is needed, what to say, and what not to say.

You may need to build your own support network or gather help not immediately available. Based on our interviews, we found that surrounding yourself with a group of people who agree to care for you and support you will help you get your bearings. We learned that a successful way to build a support network was for the surviving spouse to simplify the process by delegating the task of gathering support to one person with a “gift of administration.” This person, your Chief of Support, will find people who agree to care for you and support you during this time. He or she will identify volunteers and assign specific duties based on each individual’s gifts and experience.

If you need to build a support network, find a motivated friend or relative who will find others to lead these functions (although many of these may not apply, depending on when you read this):

• Funeral – someone to navigate arrangement, negotiation, and payment (this is no job for someone who is grieving

• Repairs – someone to guide you regarding home, business, or auto repairs so that you will not get “taken,” if you don’t have prior experience in these areas

• Legal – someone to assist you in the immediate legal issues regarding the death

• Hospitality – Someone to record gifts, support, and condolences (so you may respond later) and to “manage” your kitchen, home, correspondence, and incoming phone calls

• Announcements – Someone to notify the appropriate people about the death

• Grieving – Someone to listen to you, gently guide you, and help you guide your children

• Health – Someone to make sure you are not neglecting your health, to go to medical appointments with you, or simply to go for a walk with you

It has been said that the four most powerful words in the English language are “I need your help.” This season of life is the perfect time to ask those around you to lend their energy, expertise, and perspective. One of the participants in our interviews expressed that she heard “a thousand times” after her husband died the kind offer, “If you ever need anything, you just let me know.” If you are fortunate enough to be surrounded by those who care about you and are willing to help, this is the time to ask and the time people are the most eager to help. The process of asking and then managing those requests can sometimes be more taxing than just doing things yourself. If you need help—ask boldly.

“I NEED YOUR HELP” PART 2 – ASSEMBLING YOUR PROFESSIONAL NETWORK

If your list of things to do is long and your emotional energy or knowledge of how to do them is short, it is important to surround yourself with people who can help you. It may seem like a formidable task to find the help you need from experts you can trust, who will act in your best interest, who will take a comprehensive view, and who will work with all your advisors in a coordinated way. For people of means, there will be the need for probate administration, tax compliance, and the coordination of your wealth so that it is supporting your short- and long-term goals. If you have never been through this experience, or if your spouse handled most of your financial affairs, this may be frightening.

You may be fortunate enough to have an effective support system in place. Most people in your situation have the first two layers of support mentioned in the previous section, but developing a network of technical experts, including professional advisors, on short notice can be a daunting task. Even if you have the time, interest, or knowledge to handle your affairs, you still may need to align yourself with a team of trustworthy professionals.

If you need to conduct a selection process for professional advisors, we suggest, as in the previous section, that you delegate the initial search process to a friend or loved one who can be inquisitive on your behalf. This process, suggested in one of our interviews, will help you identify potential advisors more quickly. Your advocate should begin compiling a list of names or firms by asking for recommendations from your existing attorney, accountant, pastor, and church or community contacts. After compiling a short list of prospects, we suggest your helper call them and ask the following questions (this list is geared toward financial advisors but can be modified for accountants and attorneys as well):

Advisor Questions

• What is the focus of your practice? With what types of people do you work? With what types do you usually not work?

• What is your professional and/or technical expertise?

• How are you compensated? Other than paying you, what additional costs does a client incur (either directly or indirectly)?

• Are you compensated in any way by an investment or insurance company (mutual funds, annuities, insurance products)?

• Are you legally obligated to place client interests ahead of your own and to act only in their best interest (this is called a “fiduciary”)?

• Do you know your clients’ other advisors (CPA, attorney, financial planner)? How do you coordinate your work with other professionals?

• How many clients do you have? How many clients do you have who are in this situation? Please tell me about the solutions you have applied to their situations.

• Does your process consider all the components of a financial situation (including estate planning, asset protection and insurance, cash flow and debt, investments, income taxes, estate taxes)?

• How long have you been in this field at your current level?

• What degrees and professional certifications do you have?

• I am looking for professionals who will help coordinate long-term priorities. What questions should I have asked that I haven’t that would help me understand whether your practice is the right one for this situation?

Next, ask your helper to pare down the list based on his or her observations. Following is a list of questions you may want to ask yourself about each advisor you interview. This is far from an exhaustive process and will not guarantee selection of the right advisor, but it will help you form opinions of those you have called. It has been our experience that very few people ask advisors good questions before engaging their services. You should not engage their services without a thorough evaluation process. Be an informed consumer and take your time making a decision, especially while you are grieving.

Your Observations of the Advisor

• What questions did they ask you? People often judge character by the quality of the questions asked.

• Did they suggest solutions or products without knowing your entire financial situation? Was their solution a product on which they would receive a commission?

• Do you know anyone who knows the advisor? What have they told you about the firm/service/ individual?

• Would they have any conflict of interest if they work with you (for example, are they paid if you invest in a particular product)?

• Were they professional in their communication and demeanor?

• Did they provide any form of a guarantee (regarding investment returns), or was there any insistence that you meet a deadline or hurry in your decision-making process (with the exception of tax and probate deadlines)?

• Do they have the professional experience to handle the complexities of your financial situation?

• Did you get a sense of the professional’s “moral compass”? Would his or her values support your own?

• Would you be personally comfortable working with this person?

• Are you clear about how they are paid?

• Were they cryptic in their answers?

• Did they clearly have a solution that may work for your situation?

Once you have narrowed down your list of advisors, find out whether they offer a free initial consultation. If so, meet with them and ask them to show you what they do. Then listen carefully to how they would approach your situation and to the questions they ask you.

Ask for professional references (professionals in other disciplines with whom they work for their existing clients). Then ask those references these questions:

• Is this person qualified to work with me to accomplish my goals?

• Do you know any of his/her clients? What has their experience been?

• Is there anything I should ask about this person that would give me a complete view of their ability to successfully work with me?

• Are there other professionals you know who would be better suited for my needs?

The professional support system, for a woman of means, should be a team of competent advisors who are serving her needs in the context of her family and community relationships and in support of her rapidly changing life.

A word about financial advisors: Anyone can label themselves a “financial advisor.” We are biased toward CERTIFIED FINANCIAL PLANNER™ professionals (CFP®) who are fee-only (which is not the same as “fee-based”) because we believe that a planner will be loyal to his or her source of compensation. If you are working with a financial planner who cannot accept compensation from any source other than the client, you are working with a planner who is working to minimize conflicts of interest and isn’t driven to recommend certain products based on the compensation that those products provide to the planner. “Fee-based” is an industry moniker for fee and commission. If an advisor tells you, “this won’t cost you anything,” it means he or she is being paid commission from financial companies to sell you a product. The financial industry goes to great lengths to confuse these issues. Ask direct questions, be clear who your advisor is, and know how he or she is paid.

You should have the luxury of working with advisors you trust. But how you determine trust should be based not only on how you feel, but also on the level of accountability there is in the relationship. If there is accountability, there should be a basis for trust.

For more about finding a financial advisor, see Do I Need a Financial Planner.

A FINAL WORD – TAKING CARE OF YOURSELF

For most of our lives, many of us are taught to think of others first, not to be self-focused, and to treat others as more important than ourselves. This is a time in your life when you can defer that teaching to another time.

You may have spent much of your life taking care of others (your husband, your children, your grandchildren, your church, your community, your career). Nurturing others may be second nature to you. But right now, you need to, at least temporarily, take care of yourself first. 

You may have taken a trip in recent years and traveled by airplane. As you sat in your seat before takeoff, the flight attendant provided instructions on what to do in the event of an emergency. You may remember being told that oxygen masks would drop from the ceiling. Then you may recall the instruction that if you are sitting next to a child to put the mask on yourself first and then help the child. The same goes for you during this time. Take care of yourself first, and then, after a period of time, you may be ready to help others again.

FURTHER RESOURCES

• Armstrong, Alexandra. On Your Own: A Widow’s Passage to Emotional & Financial Well-Being. Armstrong, Fleming, & Moore, Inc. 2006.

• National Association of Personal Financial Advisors – www.NAPFA.org

SPECIAL THANKS

A special “thank you” is due to the women who shared their experiences for this article. Their willingness to talk about their loss is greatly appreciated. The perspective of professionals who support those who have lost a spouse added greatly to this content, as well. We would like to acknowledge the help of a number of professionals including attorneys, ministers and chaplains, counselors, and CPAs.

[1] “Women Want More (In Financial Services)”, Boston Consulting Group, 2009