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Financial Triage for the Suddenly Single

| February 07, 2017
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Financial Triage for the Suddenly Single

 

Whether you have become solely in charge of your financial future by death or divorce, the decisions you are faced with are likely to seem overwhelming. The flood of emotions you are experiencing may affect your decision-making capabilities, no matter how strong or independent you were as a partner.

In most relationships, responsibilities are shared. You may or may not have been the bill payor or the asset organizer. Now these, and a myriad of other roles, feel like they are all on your shoulders. You need Oxford Dictionary’s definition of “triage” – “the assignment of the degrees of urgency.” Normally the term is utilized when referring to a medical disaster, but it’s also applicable to your finances during times of personal crisis.

Good news, you have a team of professionals trained and prepared to help you. Between your financial planner, CPA, and attorney, the resources are there to take care of the urgent and allow you time to get your feet on the ground before tackling the next chapter of your life.

Important Issues to Discuss with your Financial Planner

  • A cash flow analysis will be an important step to take to determine your financial obligations and your current sources of income.
  • A “Bucket Approach” allocation of your assets. Establishing an emergency fund, if you don’t already have one, should be your priority. Once any immediate expenses are covered, positioning some of your funds for supplementing your reduced monthly income should be the next priority. After your current situation has been addressed, establishing a long-term plan for life insurance proceeds or assets designated for retirement is the final goal.
  • Updating all annuity, life insurance, and retirement plan assets with your new primary and contingent beneficiary arrangements will ensure that your wishes are met.

Important Issues to Discuss with your CPA

  • The most beneficial way to file your current year taxes. For divorcees, filing separately, jointly or married filing separately are all potential options, each with their own advantages and disadvantages. For widows and widowers, the year of your spouse’s death is the last year you are eligible to file jointly and take advantage of the expanded tax brackets and benefits.
  • Quarterly estimates may need to be adjusted to reflect your new income situation.

Important Issues to Discuss with your Attorney

  • Following the directions set forth in your deceased spouse’s will. This includes determining who will be handling the estate settlement duties. Once the Executor or Personal Representative of the Estate is established, there are several actions needed such as notifying Social Security, pension providers, and creditors.
  • Updating and revising your current will, trust, and/or powers of attorney documents based on your new situation.

Words of Caution

  • Don’t be in a rush to change existing investments.
  • Avoid emotional impulse decisions like buying a new car or moving residences.
  • Wait until you have healed and then put a holistic plan in place for your future.

Take Care of Yourself

  • Emotional and spiritual triage go hand-in-hand with financial triage.
  • Turn to your friends, family, and your higher being for support.
  • Stay busy, exercise, meditate, pray, visit family, or go to a support group. Find what works for you.

Final Thoughts

Know that you are strong, working at finding peace, and nurture your soul. Rebuilding your life is a process that goes beyond urgency. Take the time to rediscover yourself, be positive, get a vision, and set new goals for your happiness.

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