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Protecting Your Assets: Post-Death Financial Planning

The first and most important step is to not rush into anything when a loved one dies. Once you're ready, how do you find the right person to advise you?

By Patrick Simasko and Luke Stempien

“My loved one just died and now I need help dealing with my financial accounts. What’s my first step?” As an estate planning attorney and financial advisor, this is a question that I get quite often.

Simasko, Patrick

Patrick Simasko

The first and the absolutely most important step is to not rush into anything when a loved one dies. Why? Because the decisions you make at the time when you are most vulnerable can have such long lasting consequences.

Luke Stempien

Luke Stempien

When your spouse passes away, it gives you and your financial advisor the opportunity to set up new accounts and create new plans because circumstances have changed. It makes perfect sense. Especially if your spouse was the person who handled all the finances and investments. Often, as the surviving spouse, you’re bogged down by all of the changes, so working with a financial advisor could seem like a godsend. However, it’s extremely important that you take your time and look at all of your options. When everything gets consolidated into one bucket, your eggs are in one basket. Also, financial advisors typically get paid by commissions or management fees, so the more money in that bucket, the more money the advisor makes.

While you’re alive, so much of your wealth is locked up in life insurance policies or work-sponsored retirement accounts. However, when you pass away, all that money suddenly becomes available to a financial advisor’s commissions or management fees. So, when your spouse passes away and the advisor offers to help, what they’re actually trying to do is rush to secure their place as your investment advisor. The quicker they do it, the better it is for them. As a surviving spouse, you don’t want to have the “rest of your life” financial plan be determined exclusively by the first person that gets ahold of you.

How to Vet an Advisor

Think of it as going to the same family doctor for the last 25 years but now you’ve been diagnosed with cancer. Your job is to find the best cancer doctor to care for you. Look for a financial advisor in the same manner. Ask your trusted family members or friends. Ask your attorney or tax preparer. Do some research and meet with some potential advisors. Examine what they say and the advice they’re giving you. Also, be sure to look for a fiduciary. This is someone who has the legal obligation of putting your interest first.

Warning Signs You Shouldn’t Hire a Certain Advisor

If it sounds too good to be true, then that’s likely the case. Don’t look at how great things will go when they’re looking up. Look at how bad things are when they’re going down. Most people’s risk tolerance is based on how well the stock market is doing. When it’s up, everyone wants to be in. When it’s down, everyone wants to jump out. If you are that person, find an advisor that appreciates your concerns and will plan accordingly. Be careful about jumping into things right away. If it’s a fantastic plan today, it will still be a fantastic plan in a couple weeks after you’ve had an opportunity to think about it and do your own independent research on it.

Pros and Cons of Working with Your Current Advisor

Just like everyone else, advisors can get complacent, too. They also tend to look at things from certain angles. If your loved one passes away, thing have changed and it might be time to have a fresh look at your financial situation from a new viewpoint. But, remember, advisors get paid when they switch accounts from the “other guy,” so keep this in mind when listening to new advice.

How to Tell Whether or Not You’re Getting the Right Advice

Just as you trust your doctor to give you the right medical advice, the same should be said about your financial advisor. You should trust the financial advice your financial advisor is giving you. If you’ve done your background research, looked at credentials, and spoken to people who have used the financial advisor and you’ve picked them to be your own, then you should be able to trust them. However, if you feel you’re not receiving the best advice or are not comfortable with the advisor’s suggestions, you can always say, “no” or walk away from working with them.

The point is, even though as a surviving spouse you need to get your financial affairs in order, there is no need to rush into anything. So, you shouldn’t. You just lost your loved one. You might be scared, lonely, or worse, flush with a great deal of cash. So, you need to take some time. You should research financial advisors just like you would shop plane tickets. Get a number of different opinions and only then make a decision on how to proceed.

About the Authors:

Patrick Simasko

For more than 20 years, Patrick has dedicated his legal career to the practice of elder law. As a partner with Simasko Law in Mt. Clemens, MI, he helps families plan for their future, protect their assets and receive the financial and medical benefits available to them. Patrick also conducts seminars and workshops across the country to educate communities about elder law, financial planning and Medicaid, as well as VA Benefit Aid and Attendance.

Luke Stempien

Luke Stempien is a current law student at WMU-Cooley Law School. He works at Simasko Law Office in Mt. Clemens, MI, where he hones his estate planning skills and has developed a great understanding of all probate matters. He hopes to continue his career in this field of elder law to better serve those he feels could use his help the most.