Six Steps to Helping Survivors Handle Financial Decisions Alone!

Its not every day a funeral director can go beyond the call of duty for a family in need, but for some funeral directors, this is the norm rather than the exception. All funeral directors have the innate understanding that their primary role is to provide a professional and sympathetic service to grieving love ones.

Most people perceive the role ofa funeral director as someone who will make their funeral arrangements on their behalf. They do so partly for reasons of convenience, at a stressful time, and the funeral director ensures that the arrangements are carried out with dignity;to ensure the funeral arrangements are carried out in accordance with the deceased’s and the family’s wishes.

The funeral director is sometimes called upon to make the necessary payments on behalf of the family and deceased thatinclude cemetery or crematorium fees, doctor’s fees, minister’s fees and organizing the collections for charities. Funeral directors are asked to arrange for copies of the death certificate of the deceased so that life insurance benefits can be paid and financial accounts accessed.

What could be neglected, but should neverbe ignored, isthe potential for a grieving spouse to make rash financial decisions at the time of the death of their partner. Yes, Funeral Directors, as councilors, are positioned to help. Acting as the circuit breakerand being the gentle voice of reason, your kind and genuine words and insight maybe what it takes to prevent a grieving spouse from making the wrong financial decisions that will affect their wellbeing for the rest of their life.

“Sudden Money” sounds like a good idea. But, when you have always made financial decisions in conjunction with your spouse, whom you have just buried, it can be almost paralyzing. Even if one is fairly sophisticated about financial matters, the context for decision making has now changed – it is alone −without the consideration of a spouse. Stereotypically, one would think of a widow whose husband had always handled the financial matters for the home, but experience says it is true of widowers as well. We have had many attorneys tell the stories of professional men, widowers, sitting in their offices shortly after the funeral, quietly sobbing and asking, “What do I do next?”

Previous financial planning decisions were based on goals to be accomplished together; things to do and enjoy together; now, those goals may go away because they can no longer be shared with the spouse they were intended to be shared with. A little gentle direction can have potentially powerful positive effects in the life of a grieving survivor, be it widow or widower. Here are some thoughts you can consider the next time you have the need for some kind of positive reinforcement for one of your survivor clients.

Step One: Of course there are some things that won’t wait for a survivor to get refocused on their life ahead, but other than those truly urgent items, we recommend strongly that your client make no significant (and definitely no irrevocable) financial decisions for at least six months other than investing any new money (like life insurance proceeds) in a short-term investment like a T-Bill Fund, Money Market Fund, or short term Certificate of Deposit.

Step Two: Encourage them to ask themselves, “What needs to happen over the next one to three years to make you happy about your personal progress?” This can include big things like that MBA she never pursued because she stopped to raise the kids or that trip to Europe that was never taken because “we were too busy”. These are deep considerations that can be quite motivating and cause one to become forward looking again. Financial decisions can then be made in the context of new life goals.

Step Three: If they don’t already have a relationship with a competent financial planner, recommend they hire a fee-only Certified Financial PlannerTM practitioner to help them through the process of estate administration. During the administration time, they can begin to think out loud with their financial planner about their future.

Step Four: As they complete the estate administration process, it will be time to consider their own “new” estate plan. Estate considerations along with investment and cash flow considerations should result in a new “single life” financial plan to support their new life.

Step Five: Encourage them to plan and invest for a long and fulfilling life.

Step Six: Have a list of CERTIFIED FINANCIAL PLANNERSTM, Attorneys, and Public

Accountants who are both technically and emotionally equipped to help survivors. This is tremendous value-added for you and will not only be great help to your clientele, but will move them on toward being “Highly Satisfied” with your service and recommend your services to friends and family when their time comes. There is a huge economic difference between merely “satisfied” clients and “Highly Satisfied” clients as demonstrated in a study by Russ Alan Prince and put forward in his book “The Private Client Lawyer.” You may think you have little in common with a Private Client Lawyer, but you are both in the Professional Services Business and many of the same dynamics affect you both. In the chart above, you can easily see that Highly Satisfied clients add significantly to the bottom line through additional personal business and referrals to their family, friends other associates while, amazingly, it appears Satisfied clients could actually detract from earnings by informing others to avoid their lawyer. What really makes the difference between the two? The Lawyers who are “client centered” rather than “task centered” have greater success in creating Highly Satisfied clients. You can too. Do you really think in terms of the needs of you clients or in terms of performing the service? If you are focused on the service rather than on the people who are your clients, you run a good chance of having merely Satisfied clients. Focus on the people and you will have a much greater chance of producing Highly Satisfied clients. In order to find a fee-only CFP®, refer to www.napfa.org or www.cfp-ca.org.

Whether your client is someone who has always handled the finances, the spouse who never handled the finances, or a survivor who suddenly has to make decisions about major amounts of “new” money from life insurance or retirement plan benefits, they may think of their financial “wind-fall” as too small to command serious attention, consider this: $150,000 invested in a solid well managed investment earning a 8% average annual compounding rate of return will grow over 30 years to more than $1,509,399 (nothing to laugh at).

As CERTIFIED FINANCIAL PLANNERTM practitioners who were in the business in the 1990s during the run up of the tech bubble, we observed many people’s fortunes grow almost overnight as a result of being paid in employee stock optionsonly to see those same individuals lose it all through poor financial and tax planning or ill-conceived life choices in the early 2000s.

Each survivor has the opportunity to be either a wise or foolish steward of the financial assets and income in their lives. Wise counsel from competent mature professional advisors can go a long way toward helping that survivor be a wise steward and being able to enjoy the fruits of their stewardship for the rest of their lives and, if the assets are substantial, possibly affect several future generations of their family.

Speaking a few well placed words of caution at the right moment to a grieving spouse that will cause them to stop and count to ten before making any financial decisionscould be what ultimately makes all the difference in this person’s life. When a truly empathicfuneral director has acquired thewisdom to know when it is required of them to step in and be thevoice of reasonat a time of family crisis is when the true authentic professional has arrived.

By encouraging your clients to clearly identify what matters most to them, youwill bedeepening yourskill as an authentic communicator. Your clients will have a powerfully positive experience with you and your service and you will experience greater fulfillment in your vocation. Yourclient’s positive experience may produce a “Highly Satisfied” client and result in more referrals to you and your services.

As a widow’s or widower’s first councilors, if you are not comfortable or don’t feel qualified to start the conversation about financial decisions, perhaps you should direct your survivors to work with a fee-only CERTIFIED FINANCIAL PLANNERTM who specializes in this area. Remember an ounce of prevention is worth more than a pound of cure.

Charles L. Stanley, CFP, ChFC, AIF is a fee-only financial planner with Capital Financial Advisors, LLC, in sunny San Diego, California. Stanley has been serving retired physicians, business owners, corporate executives, retirees and many widows helping them with their estate planning, tax strategies, risk management, investment selection, business succession, and retirement planning for over the last 17 years. He can be reached at 858-395-8694, or cls@charlesstanley.cc or www.charlesstanley.cc

Peter J. Merrick, BA, FMA, CFP, FCSI, is President of MerrickWealth.com a fee-for- services financial planning and executive benefit advisory firm in Toronto. He is author of “The Essential Individual Pension Plan Handbook” (LexisNexis Canada, 2007) and the Canadian Securities Institute’s Individual Pension Plan Course. Peter can be contacted at 416.854.1776 or peter@merrickwealth.com