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Seek Advice Before Settling Your Late Spouse's Debts

A strong sense of security—be it emotional, mental, physical, or financial—is fundamental to a person’s well-being. This is especially true during times of grief, such as the loss of a spouse. But there are a number of financial circumstances that can make a widow feel uneasy in the wake of loss. If a new widow counted upon her spouse’s income, this by itself can be a new source of financial anxiety. Even worse, if her spouse leaves behind unresolved debts, a new widow might find herself in an even more vulnerable position.

In the case of unresolved debts, new widows need to know that there are many cases where they are not personally responsible for their spouse’s outstanding balances. Acting hastily can result in costly mistakes that could have otherwise been avoided.

Keep in mind, though, that there are many widows who choose to pay their husbands debts right away. Their reasons could include anything from honoring their husband’s commitments, readily available resources, a strong sense of ethics, or simply ease—to eliminate the burden from her financial life.

But for widows who either (1) weren’t aware of the outstanding debts accrued or (2) whose cash flow is not immediately positioned to handle paying them off, knowing your options is a great first step to taking care of this task.

Here’s what you need to know as a new widow before you settle your late spouse’s debts:

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3 Life-Changing Financial Moves to Help Widows Reduce Risk and Heal with More Confidence

In financial planning, we talk a lot about risk—how much risk you can afford to take with your investments, what kinds of risk to look out for, how risk affects potential reward, and how to mitigate risks in your own life. These are pretty standard “risk topics” financial advisors address with their clients all the time, men and women alike. But, women in particular ought to be wary of another risk they could one day face and that’s the risk of becoming a widow.

We admit, this sounds a little strange on the surface. Most wouldn’t typically consider this a financial risk in the way we typically think about them. But, the statistics regarding widowhood are astounding and prove widowhood to be one of the greatest financial risks a woman can face.

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What You Learn About Yourself Working with a Financial Advisor

Most people know that when they start working with a financial advisor, they will learn a great deal about the financial strategies they’ll use to build wealth, save on taxes, leave a legacy for their heirs, and more. But what they often do not realize is how much they will learn about themselves in the process.

You see, advisors use their knowledge and expertise to construct personal financial plans that aim to achieve their clients’ goals. These plans include not only investments, but also savings, tax strategies, and insurance. But financial goals look different for everyone. Not just because we all come to the table with different resources, but because we have different desires in how we want to use those resources.

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What is a Certified Divorce Financial Analyst?

Divorce is an extremely turbulent, stressful, and emotional process during which women are tasked with making some of the most important financial decisions of their lives. For better or worse, the reverberations from these financial decisions will impact them for years (if not decades) into the future.

So how do women approach such an emotionally charged time with a clear head and a rational decision-making process? How do they temporarily put their feelings aside and approach their divorce as a major financial event to set themselves up for a sound financial future?

Thinking financially isn’t always easy, especially when divorce is involved. But it is possible with the right help.

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What Happens to Your Home After the Loss of a Spouse?

Losing a spouse is one of life’s greatest challenges. Whether it’s expected or sudden, one of the most trying aspects is having to deal almost immediately with household expenses and personal finances. The toll grief takes on your emotions can cloud judgement and turn even minor money decisions into overly strenuous events.

One of the most difficult questions you have to answer as a surviving spouse is if you wish to stay in the family home. If you and your spouse owned a mortgaged home, it is now your full responsibility to ensure payments are made per the loan agreement.

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How Do Markets React to Geopolitical Uncertainty?

We are living in challenging times. Economically, personally, spiritually—there have been no shortage of life-changing events impacting our lives over these last few years. 

This past month is no exception with the tragic unfolding of the Russian invasion of Ukraine. It goes without saying that we are deeply saddened by this conflict and hope that a diplomatic resolution will be reached sooner rather than later.

Unfortunately, no one knows what the future will hold regarding this conflict and the impact it could have on our future both as Americans and as citizens of humanity. And also, of course, as investors. 

Many investors are understandably looking for answers. Can a link be drawn between current events and market performance?

While no one can assuredly predict what will happen in the coming weeks or months, we can look at the market’s behavior over recent history to assess some potential outcomes.

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The Benefits of Working with a Team of Advisors

What’s better than working with one amazing financial advisor? Working with a team of them, of course.

Over the past couple decades, the rise of the Independent RIA has taken the financial services world by storm. When Sam Hull first founded Northstar Financial Planning back in 1994, there weren’t nearly as many options when it came to finding a CERTIFIED FINANCIAL PLANNER™ professional to work with. Luckily, for consumers, this has all changed.

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5 Tips for Divorced Women Preparing for a Single Retirement

The 2020 Retirement Confidence Survey results revealed that while Americans had near record-high levels of confidence in their ability to live comfortably in retirement, just 43% of divorced women felt the same. A lot of reasons are given for this disparity. Among them are:

  • Divorced women have fewer assets than divorced men entering retirement.
  • Women, in general, live on average five to six years longer than men.
  • Women earn about 20 percent less than men, translating to smaller pensions and fewer contributions to their retirement plans.
  • Divorced women are less likely to have calculated their retirement needs.
  • Divorced women tend to be behind the financial learning curve.
  • Women also often take time out of the work force for family obligations

Having been "blessed" with longer life spans, divorced women face an uphill battle against time and money to create enough capital to last for the time they have been given. They need to save more money, yet they have less time and money to do so. Many women who have worked most of their lives to produce a decent income face financial insecurity in their retirement.

But there is good news. Once you're divorced, you finally have complete control of your own financial destiny. No more arguing about finances and money. That can either be liberating or intimidating. What matters now is taking the right steps to secure your financial future.

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What is Evidence-Based Investing?

If you have read much of our work, you have probably noticed we embrace evidence-based investing. But what does that mean?

1) Evidence-based investors build and manage their portfolio based on what is expected to enhance future returns and/or dampen related risk exposures, according to the most robust evidence available. This includes Nobel prize-winning theory, historical evidence, and scholarly research.

2) Evidence-based investors maintain a long-term investment strategy, despite market volatility and uncertainties along the way.

Evidence-based investing is more than meets the eye. Behavioral strategies must be in place to support the evidence-based approach. Investors who take the evidence-based approach to investing do not try and time the market by jumping in and out of investments whenever volatility strikes. They also do not gamble their income on short-term, fad “investments” that come and go out of fashion.

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What Did 2021 Teach Us About Investing?

In the wake of the unprecedented year 2020, we entered into 2021 with loose expectations, not sure what to expect. There were still so many uncertainties about where we were headed, how the markets would react, and what we’d be thinking right about now as we look back in retrospect.

Over the past two years, we have seen history through the creation and rollout of vaccines, inauguration of a new president, and even billionaires going to space. Was the Suez Canal blockage really only in March?

But in the midst of all this, we have found a few key investing principles that help our clients achieve long-term financial success.

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Checklist for Year-End Planning

Looking to year-end

The holidays are always hectic, but we hope you'll consider carving out some time for year-end financial matters.

A number of questions about proposed changes in the tax code have come our way. As the Build Back Better Act winds its way through Congress, early proposals have fallen by the wayside.

Changes in individual income tax rates, increases in rates for long-term capital gains, and updates to estate taxes are unlikely to be enacted into law.

But we may see a big increase in the cap for state and local tax (SALT) deductions, and a surtax for those with very high incomes may land in the tax code. As currently proposed, a 5% surtax would apply to individuals with income over $10 million, increasing 3% above $25 million.

There is also bipartisan support for updates to retirement rules—what’s being called SECURE Act 2.0. Recently, however, the legislation has lost momentum, as Congress deals with tight deadlines on taxes and new spending.

But let’s not leap too far into the future. Perhaps the SECURE Act 2.0 will pass next year. Comprehensive bills don’t pass quickly, even if support is bipartisan. Instead, let’s focus on tying up loose ends as the year comes to a close.

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