A young (41) woman recently asked for guidance following the loss of her husband in a car accident four months ago. Her husband had significant amounts of life insurance and left his widow with a very large estate – now sitting in money market accounts. She realized she was earning very little on these funds and didn’t want to be foolish. What should she do?
Right now – nothing. Certainly nothing with the life proceeds. Four months is too soon after the sudden loss of her husband to make significant long term financial decisions. Far better to accept minimal returns (with little or no risk) than to make hasty decisions that might have negative impacts for decades to come. The right time to begin making long term plans is different for everyone. I would think six or eight months is a minimum.
One action she should take is to begin to get financially educated. Spending time interviewing financial advisors would be a wise use of her time until she is in a position (emotionally at least) to make long term decisions. It would be wise for her to take a long a trusted family member or friend to these interviews. Very often, particularly at an emotional time such as this, a second set of eyes and ears will pick up cues she might miss. If an advisor tries to ‘hurry up’ the process faster than she is comfortable – that’s a clear signal to cross that advisor off the list. There are lots of very good advisors out there. Don’t settle.
If you have questions or comments, please send them to Gene@AskMtM.com