I was recently widowed, and my friend is going through a divorce. Our husbands handled all of our finances. How do we take control of our financial destiny?
[elizabeth mannen, senior vice president/investment officer, Mannen Financial Group of Wells Fargo Advisors]
Money and emotion are siblings, and a good financial adviser can help you separate your money from your feelings. The decisions you make now can impact your present, and more important, your future.
Take a look at not only your assets, but also any debt you might have, such as a mortgage or revolving credit. Next, have a detailed discussion of your goals, risk tolerance and time horizon for investing. Are you working? Do you have retirement to plan for? Kids to educate? Aging parents to care for financially? How do you feel when the market soars and tumbles? When do you think you’ll start needing an income from your asset base? Do you have or need insurance? What type? Do you have a new estate plan? Chances are you need one. Are your investments tax-efficient?
Working with an adviser before or during a divorce can be beneficial to your negotiations. I work with attorneys and CPAs to determine which assets are most appropriate with regards to tax treatment and other criteria. We often help guide clients as they complete their financial interrogatories and other documentation needed during this often upsetting time.
A good adviser can empower you as the CEO of your financial life. He or she can provide the education you need, whether it be in household budgeting or the markets, to be confident in your ‘new normal’ as a widow or divorcee.
[judy rubin, partner, plaza advisory group]
Whether you’re dealing with a death or a divorce, grieving and adjustment are taking place. The first step for feeling more in control is to get organized. Gather documents to know what you have and what you owe. You’ll likely need to retitle accounts and update beneficiaries, and your investments may need to be adjusted.
If all this seems too overwhelming, consider working with a financial adviser. Find a trustworthy team to collaborate with your attorney and accountant. Although it’s no guarantee of investment success or a higher level of performance, look for specially trained advisers with certifications such as Certified Financial Planner and Certified Divorce Financial Analyst.
The right adviser will review your situation and help you prioritize your needs, analyze your investments, and assess your tolerance for risk. At Plaza, we also like to do a ‘stress test’: We model unfavorable scenarios that may keep you up at night, such as job loss or a recession, and suggest modifications to your portfolio and lifestyle so you feel comfortable. We strive to understand your needs so we can help you achieve the future you want.
We know it’s daunting to dive into paperwork and deal with these issues, but you can get there, one small step at a time.
* Securities, insurance and investment advisory services offered through Royal Alliance Associates Inc., member FINRA/SIPC and a registered investment adviser. Additional insurance services may also be offered through Plaza Advisory Group Inc., which is not affiliated with Royal Alliance Associates Inc.