When the fog of this pandemic finally starts to lift, in spite of the devastation and loss, there will be many improvements to our daily lives.

The procrastination that takes place during busier times has been replaced with a resolve to plow through as many dreaded tasks as possible, to “make the most” of the quarantine.

On a small, measurable scale, garages will be cleaned out, closets will be organized, new skills and hobbies will have been explored, to name a few.

For those whose financial states have been radically altered, household budgets have been tightened.  For others, even though household income has remained unchanged, there has been time to get organized about spending and investing.

The phone conversations I’ve been having with clients, friends and family reflect this.  It has been a busy, productive time as people examine how they have spent their money in the past, and how they might want to in the future.  The Emergency Fund has taken on a whole level of significance (as have pantry staples and freezer goods).

This time to slow down and think has given way to a fresh perspective and soul-searching.  It might be uncomfortable, but it is encouraging to see people discover what is most important to them; to identify what is necessary versus what is extraneous; to uncover (and hopefully eliminate) unnecessary stresses that we invite into life; and to determine how we want to live on all levels (work, diet, activities, relationships, parenting and socializing).

All of this seems very familiar as our family has had a little practice at crisis management.

Years ago, our son’s illness turned our world upside down.  My husband took a leave from teaching to be available for doctor’s appointments and hospital stays.  We worked on our business from home and hospital.  Keeping our house as germ-free as possible was imperative to our son’s health.  We scaled back on unnecessary activities.  Everything focused on restoring his health and getting life back to normal.  Those suffering alongside us were limited to family and close friends.  The experience was isolating, made even more so by our son’s weakened immune system, which kept visits limited and anxiety levels high.

We were fortunate that our son made a full recovery, but things had changed.  There was no return to normal because our perspective had been irreparably altered – largely for the better.

It was hard to think of our son’s good health, without remembering the many sick children we met along the way who continued to struggle, or worse.  Our empathy for others’ suffering became heightened in a way that can only come from having walked that terrible walk.

Dedicating time and attention to our family unit had always been a top priority, but it was even more so afterwards.  We made sure to make memories, and take time to get away when we could.  My husband realized that working two full-time jobs was too draining, so he retired from teaching to work on our business full-time.  Time away – and time to think – allowed me to see what activities I had been participating in out of habit, not fulfillment.  I took the opportunity to resign from anything that took time away from what I truly valued.

Volunteering to help the doctors and hospital receive much-needed funds jumped to the top of extracurricular activities.  Prior to our son’s illness, we had talked about getting involved with the hospital.  Now we had the kick in the rear to do so.

As for our sons, their extracurricular activities became more concentrated and focused on only a few teams/activities to keep life manageable and not fried and hectic.

To this day, some six years later, family dinners are the norm in our home, even though the kids are now teens with many interests to take them elsewhere.

While all that discomfort, worry and anxiety was awful as we went through it, we were determined to find all the good that could come from it.  And we did.

Such is what we will all find in the aftermath of this pandemic.

There have been several projects that we have kept meaning to get to.   But without time to pause and think, they had been relegated to the backburner.  Our goal to host educational webinars suddenly has taken on a new urgency.  Clients and teachers who want to get a better hold of their financial situation are looking for help.  They are not rushing around.  There are fewer distractions.

Some want to set up their retirement plan, or increase contributions; others want to learn more about budgeting, debt consolidation and mortgage refinancing.

Unable to meet at schools, we’ve made hosting these webinars a priority.  The first one will be on Thursday 4/23 at 4 pm EST.  The topic is College Planning during a Pandemic.  To join us (or to have access to the replay), register here.  To learn more about this topic, visit Tony’s blog.

One teacher-client confessed that the webinars are just the motivation she needs to learn more about personal finance, a goal that she had kept putting off.  But now, with more quiet time than she’s ever had, she’s been able to make the time to do this.

I told her that we’re happy to help.

We might not need a pandemic to make profound changes in our lives – but we do need quiet time to think, reassess and implement.   If we all are determined to make this time as beneficial as possible to the long-term health and fulfillment of our lives, what can’t we accomplish?

We just might end up living our lives with what we value most at the center, not lost in the blurry edges and noise of daily distractions.

 

Have a topic you’d like us to cover?  Email us at 403b@ritholtzwealth.com.

 

Photo by Edgar Hernández on Unsplash

 

One of the greatest “gifts” I ever received from my parents did not feel like a gift a first; it was a torturous exercise, truth be told.  Involving me in their estate planning would be something that would offer my entire family peace of mind, but not until much later down the road.

I did not ask to be involved; I actually was uncomfortable looking at my parents’ finances; it felt like TMI.

To put things in perspective, I was not a financial advisor at the time, nor was Tony.  I was in charge of marketing communications for a mutual fund company and Tony (an avid investor) was teaching history.  It was our experience with my parents’ planning that led us to the work we do now.

One of my brothers had helped them take care of the legal part of the equation – wills, health care proxies, trusts, etc. were in place.  But now, we had to make sure everything was titled as it needed to be and that beneficiaries and contingent beneficiaries were properly named (with seven children that was a lot of form-filling).

Assets had to be consolidated from numerous accounts; stock certificates needed a better home than the bedroom closet; their portfolio needed to be realigned based on their increasing medical bills; and investments my father bought back in the 1960s needed a price at purchase (cost basis).  Tony spent a good chunk of his summer break researching average share prices in the library (this was pre-internet).

Here is where the gift part comes in – when my father died in 2004, and my mother in 2015, there was no guessing about anything (not even the music played at the funeral Mass).  Our family was able to focus on being together and mourning my parents; we were not caught scrambling in a panic over the loose ends that we should have tied up when they were alive.

Money had been set aside in a bank account in our names to pay for all the expenses that would arise before the funds were disbursed.  No one was forced to charge thousands on a credit card to pay for the funeral arrangements.

When the heart is heavy, any complications can feel overwhelming; minimizing decision-making is a tremendous help.

Yet, according to the Financial Awareness Foundation, a nonprofit organization dedicated to raising financial awareness and literacy, 120 million adults in the U.S. do not have an estate plan in place.  This leaves them and their loved ones in a precarious position.

People mistakenly think that estate planning is for millionaires, and not the average person.  That is simply not true.  Yes, people with significant assets have more complexities; but everyone needs to have a plan in place to ensure a smooth transition in the event of illness, mental incapacity or death.

I am fortunate that my colleague, Gary Pulford, has experience with the potential issues that can threaten a plan; he is a wealth of information.  You should consult with an estate planner to address your specific concerns, but here are a few basic elements you should have in place:

• Planning for right now – It is more likely for you to become impaired than to die; becoming mentally incapacitated is not limited to a long-term illness, like dementia.  Anyone can have an unfortunate accident or suffer a stroke.
  • A durable power of attorney will enable someone to handle financial decision-making responsibilities (check-writing, managing assets, etc.). This form must be on file with each institution and on every account that you want to grant someone control over should you become unable to manage your affairs.
  • A living will enables you to state your wishes regarding medical care or end-of-life decisions and a health care proxy allows you to appoint someone to make health care decisions on your behalf.

• Beneficiaries on IRAs/Roth IRAs and Retirement Plan Accounts – Assets in these accounts are not governed by the will, so make sure the beneficiaries/contingent beneficiaries are the appropriate people.  Divorces, deaths, and the arrival of children/grandchildren may have occurred since you last reviewed your accounts.  Those inheriting the accounts only need to provide the death certificate, so these assets can transition to the heirs very quickly.

• TOD on Bank Accounts and Taxable Investment Accounts – TOD or “Transfer on Death” acts much like a beneficiary designation works on a retirement account. It allows assets to move seamlessly to heirs once a death certificate is provided.

• Last Will and Testament – A will gives instructions on how an estate should be handled when someone passes.  It also appoints guardians (for the care of minor children or impaired adult children); trustees (to manage the money and the disbursements); and an executor (who collects and distributes the assets).  It can be used to distribute non-retirement investment assets (without a TOD in place); and hard assets, such as homes, real estate, vehicles and other personal property.  The will is only valid if it is in compliance with the probate laws of the state.  If you have moved to another state, your will should be reviewed.  Likewise, if your will is not current, you should review it to make sure it accurately reflects your wishes.

Among its free publications, the Financial Awareness Foundation has a free downloadable set of forms to organize and document your financial, personal, and family data.  It has an exhaustive list of items to gather, but do not be put off by this.  Rather, use the parts that are only relevant to you.

For a more basic list, check out a blog I wrote a long time ago when I deemed estate planning as an unpleasant task.

I understand why this is a chore many avoid – I really do.  But I can also say – as the daughter of parents who did the right thing – when you have this in place, it removes some stress off of your loved ones at a time when their hearts are burdened enough.

Let that be your parting gift.