But calling the landscaper or paying bills is the least of it. An advisor's greatest challenge, when the matriarch or patriarch dies, is dealing with the family dynamics. For instance, a woman can be close with her in-laws while her husband is alive, but once her husband dies, that relationship changes. Sometimes there's a falling out. Other times, the in-laws simply drift away. That's fine except when an in-law is trustee on part of the estate. Moeder says she advised one family where the husband made his brother trustee of his children's estate. Once the husband died, the family's relationship with his brother grew more distant. Yet all requests for money still had to go through him. Initially, it wasn't a problem. But after about a year, the brother wasn't really involved with the family much anymore, and it made everyone uncomfortable each time they had to approach him for a distribution from the trust.
"He wasn't familiar with what the kids were doing. He just wasn't involved with them anymore. And it's something they'll have to deal with for the life of the trust," Moeder says.
People need to understand that when their spouse is gone, the relationships between family members may change, Moeder says. The circumstances that exist when a plan is created, may not be relevant a few years down the road. And some of that heartache can be avoided if those considerations are made at the outset, Moeder says.
The number one concern of most widows, whether the size of the estate is $2 million or $20 million, is "Am I going to go broke?" It's especially true for young widows with young children. Advisors say it's a logical question, given that many suddenly find themselves with a windfall, from life insurance, or stock options or employment benefits, and yet the primary breadwinner is gone. They simply have no concept about how long that pile of cash will last.
"The bag lady thing comes up again and again," says Linda Fitz of Kochis Fitz/Quintile, mainly from the big spenders. "And I don't mean they're spending $100,000. They're spending much more."
Indeed, advisors say some clients need to do a better job managing their expenditures or their money will not last-though advisors are sometimes loath to say that to their clients. They prefer to express the message more practically and diplomatically, with statements such as, "If you continue to spend at this rate, you will run out of money at age X."
But even those widows who are not spending wantonly become concerned with whether the money will last as they see their bank balances dropping from costs that are beyond their control. For the first time in their lives, some are seeing how much it costs to run a household. They're writing checks for property taxes and landscaping bills at a time when they're also having to pay advisors, accountants and attorneys to sort out their estate-and those fees can run about $400 to $500 an hour.
"They may have us doing their returns, they may have an estate planning lawyer, people who are on hourly fees. They're suddenly doing a lot of things that are creating a lot of high bills, and you see this sticker shock," Fitz says. It's here where Fitz says she sees a distinction between the wealthy and the ultra-wealthy. Those who have, say, $5 million to $10 million, shudder at having to pay those hefty fees, whereas those whose fortunes exceed, say, $20 million, are far more accustomed to them.
Women aren't the only ones left reeling from grief and unable to get their financial bearings. Claudia Shilo, a CFP and CPA with Ballentine, Finn, & Co. in Wolfeboro, N.H., says she advises a male client who lost his wife in his mid 60s. He was a successful businessman, but his wife, a home- maker, was the one who managed their day-to-day investments and worked with their brokers. Extremely distraught, he was unable to assume any financial responsibilities and would cry at the sheer mention of his wife's name. The firm eventually referred him to a psychologist, and that was how he began to deal with the loss, Shilo says.
Sometimes it's not so much that an estate plan is put in place and the unexpected happens. Sometimes, it's death, itself, that can be the surprise-especially when it happens to someone young. Shilo says one woman came to her firm several months after her husband died of a heart attack at age 50. She had been referred by her estate attorney who was concerned about her investments. She had never paid any attention to the family finances, and was extremely distrustful of everyone around her, including her husband's former investment advisors. Shilo's firm took on the challenge of educating the woman while trying to gain her trust and get up to speed on the family's portfolio.