Pre-Post Mortem Planning?

3 Financial Mistakes That Can Haunt Your Family After Your Life Is Over

The impact of financial decisions people make today can carry on even after they die, and not always in a good way.

Failing to make the right decision – or failing to make a decision at all – can have repercussions for loved ones, whether it’s because they aren’t left with the money they need or they are left with more money than they know how to handle, says Rodger Alan Friedman, a financial advisor and author of “Forging Bonds of Steel” (

It’s especially important for those at or near retirement age to engage in an honest discussion with a financial advisor to help them feel more confident. “A seasoned, trusted advisor can steer them from common mistakes,” Friedman says. That word “trusted” is especially key. Friedman advocates that people build a strong relationship with their financial advisor so that important decisions can be discussed frankly.

“Those who have a trusted relationship with their advisors are confident they could rely on them to do what they say they will do, when they say they will do it,” Friedman says. With that strong bond, he says, the advisor can lay out strategies to help clients avoid mistakes such as these:

  • Lack of adequate life insurance
    Families may believe their finances are in order, but everything could come crashing down if a spouse whose income was counted on dies. Friedman tells the story of Jack and Diane, a couple with twin daughters and a combined annual income of $115,000 who believed their life insurance was sufficient. Then their financial advisor ran numbers that showed how the family would struggle if Jack died. They upped their coverage. That was a good thing because four years later Jack was killed in a traffic accident. The prudent life-insurance decision provided for the needs of Diane and the girls. “If your advisor points out a problem with your planning, listen closely and determine if you feel the same after you have all the facts,” Friedman says.
  • Failing to provide important information to adult children
    Many older parents exclude their adult children from their financial lives. “I understand and respect this,” Friedman says. “Perhaps the parents feel it is none of their kids’ business. Or they do not wish them to know how much they have accumulated.” Withholding important information might do more harm than good, though, Friedman says. If the parents die, those adult children would be thrust into the position of coordinating the financial affairs without any preparation. At the least, it would be prudent to share with them where important documents are kept and the names of your attorney, financial advisor and CPA, Friedman says.
  • Failing to set limits on irresponsible heirs
    Sometimes sons and daughters who inherit a large amount of money don’t know how to handle that sudden bulge in the bank account. They quickly and frivolously blow through what took their parents so long to acquire. Parents worried about that can work with a financial advisor and, ultimately, an attorney and estate planning professional to set up trusts and other tools to control how the money is spent, Friedman says.
Sometimes sons and daughters who inherit a large amount of money don’t know how to handle that sudden bulge in the bank account

This one is controversial, he says. Some people think setting restrictions is wise. Others take the view: When I’m gone, I’m gone and the kids can do what they please with their inheritance. “You will make your own determination about how you feel and what’s right for your situation,” he says. “Above all, discuss it with your advisors and arrive at a well-thought-out decision.”

About Rodger Alan Friedman
Rodger Alan Friedman, author of “Forging Bonds of Steel,” (, advises affluent retirees and near-retirees in structuring their planning and investments for the next phase of their lives. He is a managing director, founding partner and wealth manager at Steward Partners Global Advisory in the Washington, D.C., metropolitan area. He has more than three decades of experience in the financial services industry, including senior positions at Smith Barney and Morgan Stanley. Opinions expressed are those of Rodger Friedman and not necessarily those of RJFS or Raymond James. All opinions are as of this date and subject to change without notice. Steward Partners Global Advisory, LLC maintains a separate professional business relationship with, and our registered professionals offer securities through, Raymond James Financial Services, Inc. Member FINRA/SIPC