Deck 18: Divorce: Financial Planning Implications

Question 1

Describe the importance of evaluating the depth of financial knowledge of a widow in planning for her.

Answer 1

It is critical to determine the depth of financial knowledge and experience of the widow. Although women are constantly learning about finances and investments, many are financially ignorant either because they did not care or because their husbands did not involve them in the financial decision-making process. However, it is inappropriate to confuse a lack of knowledge with a lack of ability to learn.

Question 2

Is it appropriate to give nonfinancial advice to widows?

Answer 2

There is a widely held belief that widows need about a year to recover from the loss of their husbands. This belief is somewhat misleading because widows never quite recover from the permanent loss of their partners. Nevertheless, it is safe to assume that, after the first year or so, most widows learn fairly well how to cope with the situation.
It is not the place of the financial advisor to provide nonfinancial emotional support for the widow. However, the advisor can encourage the widow to seek the assistance of a grief-counseling professional.

Question 3

Why is it important to learn about the dependents in planning for widows?

Answer 3

No serious planning for widows can be done without learning about the ages and educational needs of the dependent children. Also, if the children are entitled to receive social security income, it is important to know how long they would be eligible to receive these payments.
An integral part of planning for widows is the determination of economic conditions of each of the children and grandchildren. This is because the widow may consider it desirable to contribute to their financial well-being either on a regular or on a when-needed basis.

Question 4

What is the best way of target marketing to widows?

Question 5

Question 5. According to the chapter's author, advisors interested in working with widows of their own clients should establish an initial contact:

A) Soon after the notice appears in the obituary column
B) After the widow has fully recovered from her husband's death
C) Only if the widow seeks the services of the advisor
D) Only if the widow inherits substantial assets

Question 6

Question 8. The advisor should explain to the widow all of the following concepts except:

A) Reasons for prioritizing short- and long-term goals
B) Tax planning
C) Use of present value concept in planning for widows
D) Investment planning and reduction of risk through diversification

Question 7

Question 1. When it comes to working with widows, which of the following attributes is least relevant to the planning analysis?

A) Age and number of dependents
B) Cause of deceased spouse's death
C) Financial knowledge and experience
D) Social skills
E) Amount of financial resources available

Question 8

Question 2. While we recognize that every widow is unique, it is also important to acknowledge for planning purposes that they:

A) Fall into a narrow age bracket
B) Do have certain things in common
C) All have difficulty dealing with finances
D) Have no tolerance for risk

Question 9

Question 3. According to the author of this chapter, a mistake advisors frequently make is when they assume that:

A) A career woman is better able to handle her own financial affairs
B) All widows cannot be placed in the same group
C) Many widows suffer from math anxiety
D) Lack of knowledge does not mean a lack of ability to learn

Question 10

Question 6. A widow should make irrevocable decisions:

A) Soon after she becomes a widow
B) Only after the first year of her husband's death
C) Only when the advisor guarantees that the outcomes would be successful
D) Whenever she feels up to making them

Question 11

What are some of the financial concepts that should be explained to a widow?

Question 12

It is suggested that during the initial meeting the widow should avoid making irrevocable decisions. Do you agree with this suggestion?

Question 13

Question 7. The financial plan developed for a widow should contain:

A) Taxable income and cash flow projections for the current year
B) Current balance sheet
C) Projected expenses provided by the widow
D) All of the above

Question 14

Describe the procedure, which should be followed during the initial office visit.

Question 15

Dorothy Lamar vigorously argues that since she has never dealt with finances, she is incapable to learn about it. Do you agree?

Question 16

Question 4. Which one of the following is not a good source of marketing to widows?

A) Estate planning lawyers and CPAs
B) Grief counselors and psychologists
C) Investment managers
D) Spiritual advisors and funeral directors
E) Widow support groups and other widows

Question 17

In planning for widows is it safe to assume that all widows are similar?

Question 18

Are there similarities among widows?

Question 19

Susan Tampour, who lost her husband several months ago, is still so grief-stricken that she has not been able to take any steps to improve her financial situation. Do you have any advice for her?

Question 20

Comment on the follow-up meetings that should be organized by an advisor.

Question 21

Question 10. In working with the widow, why is patience important?

A) You may need to repeat things because the widow either doesn't hear or isn't focused
B) You may spend as much time discussing family relationships as you do discussing financial issues
C) You need to respect the grieving process by realizing that the widow might not be able to focus on long-term issues for an extended time period
D) All of these reasons support the need for patience and empathetic support

Question 22

Question 9. According to the chapter's author, for the widow,

A) The financial advisor should always provide emotional support
B) As a general rule, the advisor should not provide nonfinancial emotional support
C) The advisor can encourage to seek the assistance of a grief counseling professional
D) Only B and C
E) A, B, and C