Please check out the new ACA Website – Alliance of Cambridge Advisors . This site contains several great financial planning articles. http://www.acaplanners.org
Jane M. Young CFP, EA
I know this is a subject we don’t want to think about but the reality is most wives will out live their husbands. We plot and we plan all kinds of cash flow scenarios for couples to live happily ever after until they fall gently asleep in each others arms at age 100. That would be nice but life isn’t quite so predictable. Therefore as a wife, you should plan to out live your husband. This includes being ready to handle all of the arrangements and paperwork that must be handled upon death as well as long term planning for your financial needs. Below is a list of issues that should be addressed before you become a widow.
• Select an Estate Planning Attorney who you trust and are comfortable with to draft a will and help you through the process of settling your husband’s estate.
• Draft a will and a Health Power of Attorney.
• Discuss end of life plans with each other.
• Review the beneficiary designations on IRAs, 401ks, and life insurance policies.
• Organize your financial papers so you know what you have, where you have it and who your contact is.
• Take an active role in managing your finances.
• If you are uncomfortable with finances, take some classes and read some books to educate yourself.
• If you choose to work with a Financial Planner take the time to select someone who you trust and feel comfortable with – especially when you are alone. The National Association of Personal Financial Advisors provides some good guidelines on selecting a financial planner at www.Napfa.org.
• Run some retirement planning scenarios as a widow – will you have enough money to cover your expenses if you husband predeceases you? Are you still entitled to his pension or will you receive a decreased payout?
• Does your cash flow fall short of what you need? Consider buying some term life insurance? Consider adjusting your work situation to save more money?
• What happens if one of you needs long term care? Can you cover the expense or should you consider long term care insurance?
• What happens to your health insurance when your husband dies? How much time do you have to secure health insurance in your name? Are you entitled to Cobra?
• Establish credit in your name, get your own credit card.
• Do you have adequate emergency reserves to cover funeral expenses and several months of expenses?
The loss of a spouse is extremely difficult. Most widows feel like they are in fog for the first year. The last thing on your mind will be money but some issues will need to be addressed. Make it easier on yourself and plan ahead.
FOR IMMEDIATE RELEASE Contact: Benjamin Lewis
With a few basic questions, consumers can find out if
their best interests are being protected by their advisor.
ARLINGTON HEIGHTS, IL (April 22, 2009) – As the events of the last several months have made clear, it’s never been more important for consumers to act in their own best interests when working with a financial advisor. Consumers must ask the right questions when selecting an advisor, AND they must keep asking questions on a regular basis.
The National Association of Personal Financial Advisors (NAPFA) has been a vocal advocate for the consumer for more than 25 years and is currently working with other industry organizations, congressional leaders and regulators to encourage increased protection for consumers However, even if new reforms are put in place, NAPFA encourages consumers to protect themselves by being proactive when establishing or engaging in an ongoing relationship with a financial advisor.
Regardless of which advisor is chosen, a consumer needs to ask the following questions:
- Do you work with an independent custodian? Whether your advisor is managing your money or you are the person who signs off on each financial decision, your advisor should not be holding your money. Your money should be held by an independent custodian company. Make sure you know the name of the company; how to contact the company; and your account numbers. Be sure to open and review your monthly statements and check on the accuracy of any trades and withdrawals in your accounts.
- Will I be able to review all transactions that are made? When you receive your statements, be sure you carefully look at all transactions. Make sure you understand each purchase, sale, deposit and withdrawal and why it was made. If you have a question concerning a transaction, call your advisor immediately. If you aren’t satisfied with the answer you receive, call the custodian directly.
- Will I be able to make checks payable to the custodian? When making a deposit to your investment account, write the check to the custodian, not to your advisor. Be careful of advisors who ask that checks to be made out to them.
- Do you require a General Power of Attorney? The General Power of Attorney document will allow your advisor to remove money from your accounts without your special consent. Typically a Limited Power of Attorney, which allows the advisor to make trades on your behalf, is preferred. You may want to discuss your personal situation with an attorney.
- Can I have copies of statements sent to a family member? If you don’t understand your statements, tell your advisor to send copies to a family member or another professional who can help you.
- Stay in contact with your advisor. Visit with your advisor at least annually, and stay in contact by e-mail or telephone. If your advisor is vague or evasive, ask for more information. Holding these regular meetings has the added benefit of making sure that you and your advisor are clear about your financial goals, risk tolerance, and investment strategy. In fact, poor communication between client and advisor is a more common source of dissatisfaction than any type of illegal activity.
“It is not good enough today to simply judge a financial advisor based on what you read on his or her website or in a brochure. You need to speak with them,” said Diahann W. Lassus, CFP®, CPA/PFS, national chair of NAPFA. “Advisors who are going to act in your best interests will be forthright and honest about how they operate and will truly act in a fiduciary capacity at all times.”
Consumers who are still unsure after talking with an advisor should review the advisor’s Form ADV, which is always available upon request. Additional information about a firm may be found on the Securities and Exchange Commission’s Central Registration Depository website at http://www.sec.gov/answers/crd.htm.
To obtain a longer list of questions to ask an advisor, use the Financial Advisor Diagnostic, developed by NAPFA. The Diagnostic is available for free at http://www.napfa.org/tips_tools/index.asp.
“Consumers who take the time to ask the right questions and do the necessary research will ultimately become smarter consumers of financial services,” said Ms. Lassus.
If you are interested in discussing consumer protection, please contact Benjamin Lewis at (301) 963-7555 or Benjamin.firstname.lastname@example.org.
Since 1983, The National Association of Personal Financial Advisors (NAPFA) has provided Fee-Only financial planners across the country with some of the strictest guidelines possible for professional competency, comprehensive financial planning, and Fee-Only compensation. With more than 2,200 members across the country, NAPFA has become the leading professional association in the United States dedicated to the advancement of Fee-Only financial planning.
For more information on NAPFA, please visit www.napfa.org.