Estate Planning & Financial Planning For a Recent Widow
Mrs. Etiquette has been widowed almost 5 years and was referred to our practice to discuss estate planning and financial planning. She was so overwhelmed and grief-stricken due to the death of her spouse, she had not touched her accounts for years – which is very common. We sat down with her to discuss a plan to help simplify her financial future based on current circumstances and future goals. After reviewing her situation, we discovered:
- Mrs. Etiquette did not know about all the assets that were in her deceased husband’s name to properly create an estate plan. She had a sizeable asset that was unclaimed, and therefore in the process of becoming property of the state! Because the accounts were incorrectly titled, our client did not have a clear understanding of her financial situation.
- There were no contingent beneficiaries on her late husband’s retirement accounts. This would have created confusion for her heirs, complicating the transfer of assets, and adding legal costs had she passed. Creating her financial plan allowed us to catch this oversight. Click here to find out more about the financial planning process.
- Mrs. Etiquette was uninformed about her portfolio allocation, the asset allocation of these investments, and her tax responsibility on the investments. In other words, she did not know or understand where her money was or how to manage it. Furthermore, she did not use a CPA or tax professional to review possible tax saving strategies.
- Mrs. Etiquette missed a tax deadline for the retirement accounts she inherited. Her options were now limited, as she only had until the year following her spouse’s death to put the accounts in her name. Since she did not, she will have to transfer the assets into an inherited retirement account, which now adds an additional step to an already complex situation.
Estate Planning and Financial Plan Solutions
Once we devised a financial plan, we facilitated multiple conference calls and face-to-face meetings with Mrs. Etiquette and the various companies where the investments were held. This process allowed us to help get specific paperwork needed to re-register many of the accounts in her name. Additionally, we searched the state unclaimed property and found other assets under her name.
We then combined multiple IRAs, simplified the IRA investments, and streamlined the portfolio based on Mrs. Etiquette’s needs and goals. She appreciated the explanations on why the investments were chosen and diversified in a way that was appropriate for her age and financial goals.
There are many options to help simplify this sort of complex situation. We can recommend that our clients work with a trusted lawyer, CPA, or tax professional to put a comprehensive estate plan together. Eric, Lindsey, and Chris try to ease some of the financial worries that accompany grief when a loved one is lost.
Helping clients gain confidence from a personalized financial plan is a core value of Etiquette Financial Partners. We want to help you understand the estate and financial planning process that accompanies the death of a loved one. Talk to us to help you understand your options and make decisions that can help you get your financial life back on track.
This theoretical example is meant for educational purposes only. Waddell & Reed does not offer tax or legal advice. Please consult with your tax, legal and other financial professionals regarding your personal situation prior to making any financial related decisions. 07/19