MAKING CENTS: Proper planning can make thinking about the unthinkable a little easier

The loss of a partner, after making many happy memories together, often brings a flood of emotions that can make tasks like managing financial obligations challenging.

It’s normal for the surviving spouse to worry about their future but with proper planning and help, many of those concerns can be addressed so that if the unexpected happens, important decisions with financial implications can be made urgently to minimize any monetary issues.

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It is always a tough situation and with that comes difficult conversations, but if you have the right qualified financial team alongside you they can help you through it.

One issue we tend to see is that couples tend to “divide and conquer” with one spouse more focused on the home and family, while the other spouse manages the finances and investments. It can become overwhelming for the one that doesn’t usually make the financial decisions to have to manage when the unexpected loss of their partner occurs.

There are a few things that you should do to help cope after the loss of a loved one, and firstly, to ask for help.

This can be from a family member, close friend or professional who can make things easier to deal with by having the support of others. Having a helping hand can make a huge difference in easing the burden. Your financial advisor can help you assess your financial well-being, including your current income needs, proceeds coming from life insurance policies and what to do with any investments and retirement savings accounts that your spouse may have left to you. Assets need to be transferred over in the most tax efficient manner, new beneficiaries need to be named and the estate needs to be settled.

Although it can be almost impossible to be emotionally or financially prepared, ensuring that you have control of your finances will assist in taking steps in the right direction through the healing process. It can take a year or longer after your spouse dies before you start feeling emotionally ready to take on major lifestyle decisions. That’s why it’s OK, even smart, to wait until you’re more prepared before you make any financial decisions that aren’t imperative, such as selling your home. Take some time to think about the goals you and your spouse shared and decide how your goals as an individual may change.

You should update your financial plan right away to see how the future is projected to look with the change but review it again in a year after you’ve had some time adjusting to your new life.

It is very important that you feel comfortable and trust the financial advisor you’re dealing with. It’s vital they understand your needs and that you may have different goals than your spouse.

For example, you may not be comfortable with the level of investment risk your partner was taking. It is a smoother process if you and your spouse are working with a financial team that you both feel comfortable with and who can safely guide either of you through the next stage of your life.

Lori Pinkowski is a senior portfolio manager and senior vice president, Private Client Group, at Raymond James Ltd., a member of the Canadian Investor Protection Fund. This is for informational purposes only and does not necessarily reflect the opinions of Raymond James. Lori can answer any questions at 604-915-LORI or pinkowski@raymondjames.ca. You can also listen to her every Wednesday morning on CKNW at 8:40 a.m.

 

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