Adding a Financial Advisor to Your Life Transition Team
Life throws a lot at us. We all have daily stressors, but sometimes we face life-altering experiences. This is certainly true in the case of chronic illness, the death of a spouse, or divorce. In each of these cases, in addition to the mental and physical strain, there are financial decisions to be made. Often times, there is very little time to make these important decisions. The strain from these situations is often compounded by the fact that the individual needing to make a financial decision was not the one that generally handled these kinds of questions prior to the crisis. In this instance, a financial adviser can certainly help ease some of the burden. In this article, we’ll look at how, and when, to get an adviser involved.
In the case of divorce, it is quite common that only one person in the marriage handled most of the financial decisions. This presents a unique challenge for the other individual both during and following the divorce. Though most people think to hire a lawyer, we would also recommend bringing a financial adviser into the discussion to be part of the transition team. Patina has experience working with divorced clients and we’re happy to help navigate through this challenging time. Financial advisors can complement the value that lawyers bring regarding the overall financial picture and next steps. For example, during and after the divorce, here are a few questions that often arise that we may be able to assist with.
What is my monthly spending budget?
Should I sell the current investments?
What investments do I need?
Does it make sense to liquidate insurance policies?
Would it be better to sell rental property or continue renting?
What retirement savings options exist for me after the divorce?
In the case of chronic illness or the death of a spouse, ideally, an adviser was involved at some point to assist in obtaining life insurance or extended care insurance on the individual. In this case, a payment should be forthcoming. However, it’s not always that simple. In the case of long-term care insurance, clients often have benefits through their life insurance policies that they were not aware of. Moreover, life insurance payments often have options to be paid as a lump sum or potentially paid out over time. These decisions can have a lasting effect on one’s financial future. As such, we would recommend that you get an adviser involved early to assist. Beyond insurance considerations, below are some key questions that an adviser can answer either directly or through an expert referral.
What insurance policies exist and what are the payout options?
How do any payments affect the financial plan/budget of the family?
What documents need updating (e.g., wills, trusts, etc.)?
How should the event change health/life insurance coverages?
What benefits are available through Social Security?
While we hope that you manage to avoid many of life’s challenges, it’s good to have a plan for when a crisis arises. We would be honored to be part of that plan and we’re here to help if you need us.