The Widow2019-06-26T12:35:29-05:00

Client Story: The Widow

  • Recently widowed

  • Retired

  • Never handled finances before

  • Stressed and overwhelmed

The Situation

Mary and Andrew are longtime Concentus clients. For years, we’ve served as their trusted financial advisors, so when Mary’s mother was experiencing a complicated financial situation, Mary asked us for our advice.

Mary’s father had recently passed away from a terminal illness. While his passing was not entirely unexpected, Mary’s mother, Jane, was not fully prepared to take on many of the duties that he performed for their family. Specifically, Jane’s husband had been solely responsible for their finances. Jane was suddenly overwhelmed. She didn’t know anything about their investments or financial accounts – including how to access them. Her husband had been a successful executive until his recent retirement. Over the years, he had invested in some nuanced private investments, gained ownership in large concentrated positions in publicly traded stocks, and entered a complex partnership agreement.

While still in mourning over the loss of her husband, Jane was faced with the stressful task of sorting out their finances. She expressed her concerns to Mary, worried that she would make irreversible mistakes or damage her long-term financial standing.

We suggested that Mary’s mother reach out to us to streamline her financial affairs and get help with the estate settlement and Mary agreed. Jane realized that she couldn’t handle the situation alone and quickly got in touch.

How We Helped

We first met with Jane and Mary to get a comprehensive understanding of the situation and Jane’s future goals and current and future financial needs. We helped Jane track down financial information, collect paperwork, and gain access to accounts. We compiled all of this information and developed a draft of a customized financial plan. We then met with Jane and Mary again to review the draft plan, which included a number of different scenarios and projections that they could consider. We shared the insights behind the creation of the plan to help Jane and Mary understand the options and our recommendations, with the goal of empowering Jane to feel confident in her decisions and her financial state.

Based on their feedback, we finalized the plan. This document detailed not only the strategic investment plan, but also other key considerations, including:

  • An action plan for the estate settlement

  • A debt and insurance plan

  • A current and future income strategy

  • A charitable giving plan

  • A process for communicating her future estate plan to family members

Jane and Mary both expressed their gratitude for our help. Jane felt like we really listened to her and created a plan that made sense for her unique situation at a time when she needed the support and guidance more than ever. Jane understood the plan and all of the decisions she needed to make now and in the future and was comforted that she could always reach out with a question – and would continue to meet with us on a yearly basis to review and adjust the plan.

Key Lessons

Jane’s situation is, unfortunately, not unique. For all households, the death of a family member can create a major disruption to day-to-day household activities. When it comes to widows and their finances, this is often the case. It is very common for married couples to assign roles and responsibilities for household management. In our experience, most couples elect the husband to serve as the Chief Financial Officer (“CFO”) – writing checks, paying bills, filing tax returns, executing mortgage documents, applying for life insurance, executing wills and planning documents, and making investment decisions.

Unfortunately, this type of delegation is risky for women, who often find themselves confused and overwhelmed if their spouse passes away or becomes incapacitated. Given that the current life expectancy is 83.5 years for a woman and 79.5 for a man – and women are four times as likely to be widowed than men – most women will one day have to manage their own finances.

We recommend that both spouses serve as the Chief Financial Officer to ensure joint decision-making and to help avoid potentially challenging situations in the future. While it was too late for Jane to establish this dynamic in her home, it’s never too late to take a more active role in your finances.

All women – regardless of their age, income, or marital status – should actively participate in their financial lives as early as possible to ensure long-term success and to avoid the challenges that can result from remaining disengaged. Here are some of the key lessons we can learn from Jane:

  1. If only one spouse is in charge of the family’s finances, it can lead to their wives (or children) dealing with unnecessary challenges if they pass away
  2. It can be empowering to take charge of your finances, and it’s often easier than it seems, especially with the right guidance
  3. Getting involved in your finances will give you confidence and help to ensure that the plan you have in place accurately reflects the future you both envision
  4. A trusted financial advisor can help to ensure comprehensive financial management, filling in gaps related to wills, healthcare proxies, and powers of attorney, and they will also provide a supportive, knowledgeable support system who is available when you need them the most

It’s important to establish financial security before a challenging event arises. If you already have a financial advisor, get involved and make sure the plan you have in place reflects your shared goals. If you don’t have an advisor, establish a relationship now to ensure long-term success.

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