Tuesday, March 9, 2021

In Sickness and In Health

Ask The CFP® Practitioner

“All love that has not friendship at its base, is like a mansion built on sand.”

~ Ella Wheeler-Wilcox,
     American Author and Poet (1850-1919).

Question:  My neighbor’s husband is quite ill and he’s not expected to recover. She and I have been close for many years and she’s shared that he handles all their financial affairs. She’s expressed concern about this and is worried about him not being able to stay on top of everything now, and how she’ll take over in the future. How do you suggest that I gently begin a conversation about helping her take on more responsibility in this area?

Answer: Your neighbors are fortunate to have such a thoughtful friend. One way to approach this tender and difficult conversation is to share how you may share financial responsibilities in your home. Most families have a designated Chief Financial Officer or CFO who takes charge of all financial matters. You may want to casually discuss the practical benefits of cross-training in this area. Granted, explaining how financial affairs are handled isn’t everyone’s idea of quality time together, but it is necessary.

In our house, I’m the CFO while Pete is CEO and COO in charge of other matters. Several times while I was traveling, he needed to take action on items when I wasn’t readily available. Fortunately, he knew exactly what to do because we’ve taken the time to review everything. Addressing this task sooner than later in any relationship may ease future difficulties.

An example of one practical matter to discuss is whether both names are on at least one — or all — important accounts so there is access to liquidity in an emergency. Having to borrow funds to get through a crisis or sustain liquidity during a lengthy probate process may not be advantageous and could easily be avoided. Knowing digital passwords to retrieve financial information is another crucial conversation to have. Additionally, understanding any budgeting software used would be helpful. Sharing this type of information, sharing and transitioning duties may also reduce stress for everyone involved.

Shockingly, on average, women find themselves widowed in their fifties according to the U.S. Census Bureau. This could mean thirty years of handling our own financial affairs. Of surviving women, 53% say they and their spouse had done no financial planning in case one of them passed away. In addition, only about 14% of women were involved in making financial decisions before their husbands died, which could result in some surprises in widowhood.

Ways to simplify and streamline the cross-training process include asking for help from family and your team of financial professionals, including a CERTIFIED FINANICAL PLANNER™ Practitioner. Managing multiple accounts, especially ones of relatively small value, can be tedious. Consider parking everything in one place. Not only will it be easier to manage, but you’ll be able to see your financial big picture.

Update wills, powers of attorney, healthcare directives and beneficiaries. Ensure accounts are in both your names and titled properly. You will glide past many surprises by doing so.

Talk with your advisor about the claiming strategy options you’ll have as a survivor, including any dependents you may have. You’ll want to maximize every source of income, and Social Security is an important one.

Chronic illness drains all involved. Facing emotions and the potential fallout can be overwhelming. The emotional support of family and friends allows those impacted to move forward. When appropriate, enlisting the help of professionals may be helpful. A CFP® practitioner, held to fiduciary standards, can provide support and guidance along the way. Speaking with one’s attorney and accountant can also help to prioritize concerns and tasks. Others have gone through these trials before. The good news is that we can help each other and lend guidance.

At the same time, don’t overlook the importance of self-care and staying connected with close friends and loved ones. No matter how difficult it may seem, maintaining proper sleep and exercise regimes may help reduce the effects of stress and lift spirits. Having a plan for each day as well as the future helps to maintain focus. Planning for tomorrow while enjoying today is the challenge of accepting life on life’s terms. Open dialogue, solid preparation and ongoing support allows us to cope, survive and eventually thrive. Having this conversation with your friend shows that you care and allows her the opportunity to include her spouse, family and professional advisors while they navigate the path forward and empowering her when she may need it the most. Stay focused and plan accordingly.

The data and information contained herein was obtained from sources considered to be reliable, but accuracy and completeness are not guaranteed. Consult with legal and accounting professionals where appropriate. Any opinions are those not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice.

“Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.” 

This article provided by Darcie Guerin, CFP®, Vice President, Investments & Branch Manager of Raymond James & Associates, Inc. Member New York Stock Exchange/SIPC 606 Bald Eagle Dr. Suite 401, Marco Island, FL 34145. She may be reached at 239-389-1041, email darcie.guerin@raymondjames.com. Website: www.raymondjames.com/Darcie.

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