Preserving Goals after Loss of a Spouse
Retirees Jean and Ron were clients of Arbor Trust. Ron had been a career pilot and the primary breadwinner for his family while Jean raised their three daughters. Over the years, Ron managed the couple’s finances including consistent annual contributions to his IRA, which paid off handsomely. As Ron approached age 70, he was diagnosed with Parkinson’s disease, which advanced quickly. He and Jean decided to spend their remaining time together, traveling and visiting with family. However, he told his team at Arbor Trust that if something were to happen to him, our priority should be to look after Jean from a financial perspective. He wanted to make sure she would be comfortable and secure once she was on her own.
Ron died four years after his diagnosis. Before his death, he had worked with Arbor Trust and his estate planning attorney to revise his estate plan so that his estate and investment goals were clearly aligned. Still recovering from the emotional turmoil that follows the death of a spouse, Jean called Arbor Trust with questions and concerns about her financial future. Although she had regularly attended meetings with Ron and their trusted advisors at Arbor Trust, her energies had been devoted to raising their three daughters and volunteering in the community. Plus, she was confident in Ron’s focus on their finances.
Jean wanted to make sure she had enough money to maintain her residence and pay her bills for the rest of her life. She also wanted to make sure she could leave assets to her daughters following her death.
Having relied on Ron to manage the finances, Jean was more comfortable seeking out advice and guidance than assuming this new and weighty responsibility herself.
What we could not plan for was that Jean would remarry two years after Ron’s death and that she would maintain the inheritance plans she and Ron had developed.
We took to heart Ron’s request that Jean be taken care of — and we knew through our regular meetings with Jean and Ron that she was not engaged in the family finances and thus, would need help taking over that responsibility after Ron died. We gave Jean time; whenever she needed to ask questions or just talk, we offered her help and support. When she was ready, we started to talk about her financial future.
Alternatives and Solution
We developed a financial plan for Jean that detailed her monthly budget and living costs. Once we had a clear picture of her new monthly expenses, we made adjustments and amended the plan as her life evolved. Two years later, when she told us she was planning to remarry, we worked with her estate planning attorney to arrange for a prenuptial agreement and an appropriate beneficiary designation for her rollover IRA to ensure the fulfillment of her goal to leave assets to her daughters.
Execution and Results
Jean, her second husband and her children are all clients of Arbor Trust now. We are privileged to have been by Jean’s side, helping her manage the financial aspects of losing her husband and creating a new life, precisely as Ron requested.
This case study is provided for illustrative purposes only to provide an example of the Firm’s process and methodology. Past performance is no guarantee of future results. The results portrayed in this case study are not representative of all of the Firm’s clients or the clients’ experiences. Different types of investments involve varying degrees of risk, and actual results may vary materially than those portrayed herein. Therefore, it should not be assumed that the future results of any specific investment or investment strategy will be profitable or equal the results portrayed herein. An individual’s experience may vary based on his or her individual circumstances and there can be no assurance that the Firm will be able to achieve similar results in comparable situations. No portion of this case study is to be interpreted as a testimonial or endorsement of the Firm’s investment advisory services and it is not known whether the Firm’s clients whose amalgamations the testimonials are based upon approve of the Firm or its services. The information contained herein should not be construed as personalized investment advice. Please contact us for additional information with respect to the strategies and/or investments described herein.