The death of a spouse evokes an array of emotions. One emotion is uncertainty about future financial matters. How does the surviving spouse go about finding an adviser?
Through family members? Friends? Acquaintances?
Does he or she look in the Yellow Pages?
And what criterion helps determine trust and reliability?
Avoiding abuse
Unfortunately there are unscrupulous people out there whose recommendations benefit them at the expense of the surviving spouse. This is especially true if the surviving spouse is elderly and has never been involved in the financial affairs of the family.
To help the public recognize and avoid abusive tax schemes, the Internal Revenue Service offers an abundance of educational materials.
Education, they say, is the best way to avoid the pitfalls of “too good to be true” arrangements.
Here are some practical tips for determining whom to trust:
- Check out the adviser and financial institution. It is surprising how many will contact a widow or widower. Since there are a number of professionals who provide financial advice, the surviving spouse will need to do some homework.
- Check out the adviser’s credentials and experience. Get references- the trustworthy adviser is willing to provide this information. Do follow up with references to verify their satisfaction with the adviser.
- Ask how the adviser is compensated. Commission-based advice can be expensive. “Free” advice, however, may mean a widow or widower will incur costs through the products or arrangements included in the advice. If the fees and costs are unclear, then ask for more information.
- Don’t be rushed. A trusted adviser will not urge someone to make quick decisions until he or she has had time to regain emotional equilibrium. A trustworthy adviser has the surviving spouse’s best interests at heart- hence expect patience and a compassionate attitude.
- Do ask questions. Start a list of questions. Don’t worry about relevancy- just jot things down as they come to mind. If answers to technical questions aren’t clear, then ask for plain-language information. A trustworthy adviser will encourage questions and be diligent in providing answers.
Within adversity lies opportunity. Cash flow is always a concern- will there be enough to maintain a home and lifestyle? This concern is particularly important for women. According to the Women’s Institute for Financial Education, nearly one-quarter of widows are broke within two months of the husband’s death.
Trust is fundamental when choosing an adviser; don’t compromise.
(GuideStone)
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