Guiding widows into a new life

Working with women who've lost a spouse requires behavioral-finance acumen; 'decision-free zone'

Mar 17, 2013 @ 12:01 am

By Dan Jamieson

Twenty years ago, Joy Kirsch was widowed at the age of 30. “I was already a financial planner at the time, and I knew what I should be doing,” she said. “But I was not emotionally prepared for how it affected me — I really was the deer in the headlights.”

Realizing that the stress she was feeling must be even worse for women without financial expertise, Ms. Kirsch began studying how grief affects decision making. It eventually led her to specialize in providing financial advice to widows.

“Anything I could get my hands on about behavioral finance, I grabbed,” she said.

She now readily cites a list of behaviors and issues planners will face with newly widowed clients.

One of the most common problems is a lack of focus. With family members and advisers pressuring a widow to make many difficult decisions, she will often reach a point of paralysis, Ms. Kirsch said.

DECISION OVERLOAD

And there are many decisions to make: Will she stay in her current home? Will she pay off the mortgage? And how will she deal with competing interests from the kids, who may be from different marriages?

Meanwhile, widows must take care of changes in Social Security benefits, retitle accounts, deal with insurance companies and meet with other professionals such as estate attorneys.

So Ms. Kirsch aims to reduce the pressure and create a “decision-free zone” by listing all the tasks to do, then narrowing it down to three or fewer items that need to be addressed immediately.

“You will literally see a sense of relief,” she said. “It's important for her not to have to address a decision she doesn't have to, because she will not be operating at full capacity.”

Ms. Kirsch then arms clients so they can deal with family members and others who are offering advice.

“I want to get out all the concerns, all the obstacles, and give her the language of saying, 'We're going to get to that. I'm working with a professional who will talk to you about that. I'm not going to make that decision now.'”

Some newly widowed clients may also worry about running out of money.

Ms. Kirsch told of one such client who showed up for a meeting with a brand- new luxury car. “She said she was afraid it was the last car she would be able to buy,” Ms. Kirsch recalled.

LEVEL INCOME

It's important for advisers to maintain the status quo as much as possible by trying to ensure the same level of income as before the spouse's death, with plenty of liquidity, Ms. Kirsch said.

The widow may not need the income, but knowing it's there will help her through the transition.

In 2011, Ms. Kirsch founded a nonprofit organization, The Widow's Journey, to provide widows with education, professional resources and emotional support.

“I did that because I recognize there are a lot of women who will not qualify to be clients,” said Ms. Kirsch, who limits her practice to less than 100 households.

“It takes extra time to work with widows,” she said.

Ms. Kirsch said her practice, Kirsch & Associates in Bedford, Texas, is about 60% female clients, with the rest mostly couples.

ROOM FOR MEN

“I work with women and the men who love them,” she said. “Of my widows and divorcees, a lot of them remarry.”

And she says she “very consciously chose a male” colleague, Tony Pitzer, her younger associate in the practice, to provide a balance.

“His role is primarily money management tasks, but I also bring him in to meet with a widow when I get a sense she is missing a male perspective. Some older widows have often relied on men to make decisions, and having a man in the meeting can give a deeper sense of security.”

Ms. Kirsch credits the Sudden Money Institute with helping her fully develop the expertise to help widows. Founded by adviser Susan Bradley in 2000, the institute trains advisers on how to deal with major events in clients' lives.

Ms. Kirsch doesn't worry about limiting herself by focusing primarily on the needs of widows.

“Unfortunately, as baby boomers age, it's becoming a bigger and bigger issue,” she said.

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