Planning to plan for financial decisions in case of major life changes

April 23, 2013 

I like it when conversations with clients or friends help me come up with worthwhile topics for articles to share with others. A meeting with a prospective client of my firm the other day provided the idea for today's article.

We will all, at some point, lose our ability to be the best one to handle financial decisions and details for our household. This day may arrive suddenly through an unforeseen passing that leaves a spouse or the kids to figure out where assets and records are, and to handle investment decisions.

These individuals may have little training or experience with the process, and may feel pressure to make decisions during a time of great emotion and stress.

Or, the day may come through the slow passing of time where the desire to handle the details of

the investment plan, filing of taxes and other activities are just not how you want to spend your time any more.

I recommend that individuals and families start to plan for the day when they cannot -- or don't desire to -- handle their own financial planning details well in advance of when they are likely to need the help.

The process can start with introductory meetings like I had with Jim the other day. A veteran of the financial world, Jim doesn't desire or need help managing his portfolio adequately at the present time.

However, he is concerned about his spouse, who is less interested in the details of managing the sizeable portfolio they have built over the years, and who she might seek help from if something sudden should happen to him, or if the passing of time changes Jim's priorities on how he wants to spend his time.

Forming a relationship with an investment advisor, tax professional and estate planning attorney can be a valuable use of time, even if you are not ready to turn over the management of all your affairs right now.

Even adult children can be part of this process since they may have to be involved in your affairs at some point, and it would be nice for them not to be dealing with a total stranger.

Statistics recently available also point to a somewhat troubling trend. Since women live longer, on average, than men, or may have to handle their own finances in the wake of a divorce, it is important for women to be involved in the relationship with the financial professionals.

In many households the old-fashioned method of the male handling the investments and tax preparation leaves the woman feeling uncomfortable and foreign to the advisor. Recent studies show that more than 70 percent of women change advisors within six months of the death of a spouse or divorce.

Obviously, making the decisions on hiring new advisors is best done before a period of significant grief or stress, and it never hurts to start early to get to know the people you can turn to for help later on.

Tom Breiter, president of Breiter Capital Management, Inc., is a registered investment adviser. He can be reached at 941-778-1900.

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