Planning for the Unexpected

A Story of Loss and What You Can Learn from It.

“We never truly get over a loss, but we can move forward and evolve from it.”  – Elizabeth Berrien

When I first began to work with financial planning clients, I met a woman whose story has stayed with me, and will undoubtedly be a guidepost for me for the rest of my life.  Sarah* was 38, and a recent widow.  She had three kids under the age of 8, and was on her own for the first time after her husband died suddenly and very unexpectedly.  He was in good health, had no signs or symptoms, and one day he was gone.  I cannot begin to touch upon the emotional component of this – the loss of a loved one is never something you can truly prepare for.   However, what has remained with me was the financial aspect.   Sarah’s husband was a highly compensated executive, at the beginning of his career.  They didn’t have a huge amount of wealth, but his income was solid and growing – they owned a home with a large mortgage, and had big plans for saving for college and retirement.  So, he bought life insurance in an amount that took into consideration his income, and their future plans.  As a result, Sarah was left a young widow but had enough money in trust for herself and her children that she did not have the additional stress of financial worry. 

I have also worked with clients whose stories differ, and who unexpectedly lost a loved one and didn’t have the proper planning in place.  There are still solutions, but without the planning at the beginning, it’s harder to financially recover.  

Planning for life events like this is scary – some of us are superstitious about planning for something so horrible and traumatic, as though planning will cause the event itself.  Others are simply paralyzed by a lack of information and time.  However, it’s not as difficult as it may seem, and when you start early it’s much less daunting.  My advice as a CERTIFIED FINANCIAL PLANNER™ and former estate planning attorney?  Plan now, while you are both able to discuss it and address the potential challenges.  It will be difficult and scary, but worth it.

Here are 5 questions to get you started. 

1. Do both of you have the right amount and the right kind of life insurance?

Pair with a qualified (non-salesy) insurance professional and your financial planner to understand how much insurance you need.  Consider how much income you’ll be replacing, and how long that income was expected to continue.  And don’t forget about a stay at home spouse – both partners should be adequately insured. 

When considering life insurance, make sure you can afford to keep it in place.  Most young couples will be fine with term insurance.  Depending on your cash flow, it may make sense to consider other types of insurance, but make sure you fully understand what you’re buying.  A good insurance professional will take the time to educate both spouses to ensure you are comfortable. 

It’s also important to discuss disability insurance, which can cover income in the event that a spouse is unable to earn what he or she once could. 

2. Do both of you understand the family finances?

Anecdotally I’d say 90% of couples fall into the habit of delegating (I know we do in my house).  Often one spouse has a better grip on the finances than the other.  This doesn’t mean that both spouses need to memorize each mutual fund or share of stock, but you both should know the basics:

  • What do we own?
  • How do we own it (i.e., joint, individual, in a trust?)
  • Where is it located (financial institution, with an employer)?
  • Who do I speak with about this account?

It’s important to gather your team together and confirm that they are all working together – your financial planner, estate planning attorney, accountant and any other resources should be well acquainted.  As a financial planner, I often play the role of quarterback, organizing the team and checking in with each professional to ensure that my clients’ plans are being properly implemented. 

3. Do both of you understand how the home is run and maintained?

If you own real estate, you may find yourself adhering to the delegation habit I mentioned above.  Again, you don’t need to know everything, but you should both have a general understanding of what is required (and how much it costs) to maintain your home.  I don’t just mean property taxes and keeping the lights on. 

Think about putting together a home maintenance binder or checklist.  Know what professionals you normally use, and maintenance schedules or upcoming plans that affect your home (does your partner know in the back of his mind that the hot water heater needs to be replaced next year and you have no clue?). 

4. Do both of you have their estate plans in order?

When I put my plan together and thought about the idea of leaving my three-year-old behind without me, or without her father, I got emotional – it’s hard to envision something like that happening.  However, putting even a simple estate plan put together will bring you greater peace of mind than just worrying about what could happen.

These are the most crucial elements to consider:

  • Who will be the guardian of your minor children?
  • If you’re leaving money to the kids, will it be in trust?  Who is the Trustee?  If the Trustee is different than the guardian you chose, can the two work well together?
  • Who would you like to make medical decisions on your behalf if you’re unable to do so?
  • What are your wishes for end of life (i.e., life support, etc.)?

Beyond the above are many issues that are specific to each family.  Pair with an attorney who specializes in estate planning to complete your documents, and ask your team to work together.  Your financial planner should work together with your estate planning attorney to be certain the plan is implemented properly.

5. Have you talked openly and honestly about what you’d want to happen if either of you passes away in the near future?

Having documents in place is a great start, but having a discussion about what you’d want to happen is important, too.  This doesn’t have to be dark and frightening.  Use this opportunity also to be grateful for what you have, and to help you and your family to see the bigger picture.  Life is short and our time is precious.  Plan smart, be present in your life, and focus on what’s important. 

The opinions voiced in this material are for general information only and not intended to provide specific advice or recommendations for any individual.

Meet the founder of our widow’s divisions, Joy Kirsh.

 At age 30, is when Joy became widowed, she lost her husband, best friend and business partner. She quickly discovered that she had no real education or training about how grief affects our brains and bodies. Her natural curiosity and desire to “get it right” led to years of study around life-changing events and how they affect financial decision-making. She now devotes her time to helping other women prepare for life’s transitions with the goal of improving financial well-being. “Life Happens and sometimes it’s difficult, but we get to influence the outcome. I want women to have the resilience, courage, and wisdom to make good financial decisions while moving forward through difficult times with confidence and a sense of purpose.”

Joy believes that true wealth is not just a measure of one’s financial assets, but the sum of a person’s health, wealth and personal relationships. She has devoted her professional career to helping others define their values, dream new dreams and align their wealth accordingly. She is a CERTIFIED FINANCIAL PLANNER™ Practitioner, a Certified Financial Transitionist® through the Sudden Money® Institute and the founder of The Widows Journey, a non-profit entity dedicated to educating and empowering widows to allow them to lean into life and make a difference in the world. She is a member of the Dallas Financial Planning Association and former chairman of the Fort Worth Business and Estate Section of the Tarrant County Bar Association. She is securities and insurance licensed and graduated cum laude from the University of Dallas with a bachelor’s degree in Economics.

Although Joy has won several industry awards, she is most proud of her twenty-five talented, beautiful and exceptional nieces and nephews. When she’s not hanging out with those little family members, she enjoys golf and tennis, weight training, yoga, meditation and trying every new restaurant in Dallas with her beau, Ron.

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