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DLester78 (67.16)

Grief and Inheritance



December 07, 2012 – Comments (3)

I am a financial advisor I cannot publish my name or my firm due to regulatory concerns and a super strict broker-dealer.  I am not a writer, but I do think, and I wanted to explore this avenue of clarifying my thoughts.  Hope you enjoy.

I currently have 4 open cases where someone has recently passed away or we are scrambling to get final documents/wishes in order to prepare for death.  If you have not sat down and done a will or a living trust I would urge you to do it. The complications and potential fighting for your family could be catastrophic.

I have one client who is taking massive doses of Oxycontin. He has stage four cancer and it has spread throughout his body.  He just executed a will but I know that it could be contested that he did this document under the influence of drugs and was not of sound mind.  It sounds crazy but those of us who have been through family disputes with clients know that they turn ugly fast.  Get it done in other words. 

The real topic today is focused on the destructive behavior that I have seen exhibited by grieving survivors.  You will deal with these situations very differently than others but a basic rule applies to all survivors... don't make any serious financial decisions for at least 6 months. Even better if you can wait a full year.

I will share with you a case study that illustrates my point.

Mike and Sally Client came to me in October of 2010 and asked me to lower the amount of life insurance they had on each other from $500,000 to $250,000.  They had just completed a series of courses through their church put on by a disciple of Dave Ramsey.  I am not sure why but they had been advised by this "teacher" to lower the amount of life insurance since they "didn't need it."  I politely disagreed but followed their wishes and started underwriting both of them.  Two weeks later the 52 year old wife passed away from a sudden heart attack.  Luckily for Mike we still had not cancelled the other policy.  The insurance company paid the claim within two weeks and Joe not only inherited the insurance, but also her $270,000 in qualified assets as well as a rental property. 

The aftermath...  Mike first became to generous.  I think he felt guilty for having the money.  He immediately bought a car, paid off debt, and set up college funds for his step-kids.   They don't even talk to him now because they think they should have gotten more.  He gave money the next month to his church to the tune of $50k.  He then quit his long time job as a facilities manager for a large commercial building here in town.  He told me that he was starting a business.  This business was in internet marketing. Nothing to do with his background, his passions, his knowledge base.  He now has burned through all of the money from the life insurance and recently had to sell the rental property to get money to live on.  He also is in his late 50's and is having trouble finding a job.  This last week he came in and took his third early distribution from the inherited qualified account as well. 

He now regrets making many of these decisions.  He just passed the two year mark of losing his wife.  In an honest moment with me over coffee he admitted that he made most of these decisions out of fear, anger, and hopelessness.  My advice from the beginning never changed.  Stop, relax, take a deep breath and figure out what your new life looks like.  Do you want to even live in the same town?  Do you want to be a business owner? Do you want to go and be a golf instructor at a nice mountain golf community and live a simple life? 

If you ever lose soemone you love and you are fortunate enough to recieve an inheritance, then don't kill that legacy with grief.  Dont' ruin a lifetime of work and savings by trying to replace your loved one with posessions.  Don't start a business you know nothing about and have never had a passion for previously.  Most of all take the proper amount of time to heal and have a clear vision for your future prior to doing anything major.


3 Comments – Post Your Own

#1) On December 07, 2012 at 11:53 AM, Mwojnarowicz (< 20) wrote:

What great advice. Your firm should be proud of you.

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#2) On December 07, 2012 at 12:29 PM, EnigmaDude (58.55) wrote:

Thanks for your thoughts and for sharing your experiences!

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#3) On December 12, 2012 at 11:28 AM, lemoneater (57.45) wrote:

Don't ruin a lifetime of work and savings by trying to replace your loved one with possessions. . .take the proper amount of time to heal and have a clear vision for your future prior to doing anything major.

Very wise advice.

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