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How Families Can Be Ready For the Early Death of a Loved One



There is no good time to talk about death. And that is probably why far too many people – including ultra-high net worth families – avoid the discussion, and end up bringing about additional and unnecessary stress and pain when death comes to a family member or loved one.

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Clients frequently share with us how the knowledge gained from this book helped provide them tremendous clarity, shattering industry-pitched ideologies, while offering insight and direction in making such important financial decisions.

All of this is made much worse when the loss comes unexpectedly early.

You were planning for years of life, income, and enjoyment, and then suddenly, someone very close to you is gone. How do you react? What do you do now?

There are several stages of grief. But at some point, you will have to come around to dealing with the financial impact of the loss. When a loved one dies earlier than anyone expected, the financial impact can be particularly challenging, especially if you haven’t planned for the possibility in advance.

The good news is – you actually can incorporate the possibility of losing a loved one early into your investment plan. Why would you want to do this? Because the failure to do so can make an already tragic and painful situation far worse than it needed to be.

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Here are five ways an early loss of a loved one can impact the finances of an ultra-high net worth family.

5 Ways a Loved One’s Early Death Can Affect ULTRA-HIGH NET WORTH Finances

1. Death Happens Just After Retirement

Suppose you just retired, meaning your income is now much lower, and then a close family member dies. You had plans to spend many years with this person, and now they’re gone. If this person’s income was tied to your livelihood, you now have more uncertainty than before.

Perhaps it was a spouse, and you retired but they planned to work a few more years. Perhaps it was a son or daughter, or close relative, and you had planned to pay for college expenses, or go on a big trip. All these and many other scenarios now need to be reworked.

2. Death Happens During a Recession

Losing a job during a recession is bad. But having a loved one die early in their life during a recession is even worse. Not only do you not get to live the rest of your life with them, but you don’t have them to be with you through the tough times.

And if they were earning income, you must now endure the recession without the extra cushion. The loss of income is permanent. You will have to make big adjustments to your finances and possibly your lifestyle – especially if you hadn’t planned for this possibility in advance.

3. Death Happens Right After Locking Up a Chunk of Money

Suppose you just invested in a second or third home, or in a new business, or with a venture capital or private equity firm. Suppose you just socked away a bunch of money in an annuity. And then a close loved one dies way earlier than anyone imagined.

With all that money locked up, you may be suddenly facing an unexpected cash shortage and now more fearsome debts, especially if the loved one who died was earning the larger share of income.

How will you sort all this out?

This is, by the way, one of the main reasons Pillar Wealth Management recommends against annuities in almost every situation. If the annuity was in your loved one’s it may cost you a fortune in fees to cash it out and create immediate liquidity.

Any big investment that reduces your liquidity – meaning you cannot access the capital quickly – carries greater risk and reduces your financial serenity. And one of those risks is that someone close to you dies early and unexpectedly. Suddenly, you need the money, but it’s beyond your reach.

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4. Death Happens Right Before You Sell Your Business

Perhaps one spouse has already retired, and the other is planning to sell the business so they can enjoy their retirement together. If the retired spouse dies unexpectedly, should the other one still sell their business? All the financial effects of that decision will look different now. Questions that had been answered and settled now have to be asked all over again.

5. Death Happens Right After a Divorce

Divorce itself can be incredibly costly. See 10 ways divorce impacts high net worth families. But if someone dies around the same time as a divorce, more than just a marriage will be breaking. Perhaps one of the children is dying, or one of the divorcing spouses. Perhaps a key parent figure or other relative who provides a stabilizing presence in the family.

What was already a discouraging situation will now be even harder to navigate, and without a financial plan that offers the stability you will long for, you’ll be in for a tough season. And keep in mind – this doesn’t have to be your divorce.

You might have a great marriage. You might be single. But it could be a sibling’s, a parent’s, an uncle’s, or some other close family member who is tied to you financially in some way.

Suppose your parents get divorced, and the inheritance you anticipated is now in doubt. If the parent who favored giving you a greater share of the estate is the one who dies, much more could now be lost than the loved one.

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How to Respond Financially When a Loved One Dies Early

We could list many more ways the early death of a loved one can impact high net worth families. The five examples you just read are meant simply to get you thinking about how a negative life event like this can affect you, financially.

But if a tragic early death were to happen to someone in your life, and if it caused a negative financial impact, how should you respond? Here are a few things to consider:

  • Rethink buying or selling a business or real estate

What might have made sense before may not be wise now. Give it some time until you can more clearly re-assess your situation, priorities, goals, and desires.

  • Change your estate plan

Some of your heirs may get more or less than you had planned to give them before, depending on who has died. Other financial goals in your estate plan that may have been important before no longer are.

If a primary beneficiary is the one who dies early, you will need to change that designation in all your accounts where their name was listed.

Having an experienced high net worth wealth manager working with you through this difficult time will save you inestimable amounts of grief and stress.

  • Adjust your philanthropic plans

When a loved one dies early, you may no longer want to give money to certain causes that may have been more important to the person who died. Or, you may want to give more, perhaps in their honor. If you were running a foundation with the person who died, do you want to keep it, pass it off, or disband it?

  • Adjust your lifestyle

Travel plans, recreational plans, investment plans, family plans, hosting plans, volunteer plans, spiritual plans – all of these and much more can change when a loved one dies early. What you were planning to spend in dollars and in time may increase or decrease quite a lot, especially if the person who died was an integral part of those plans.

As you consider all these areas of life that are affected if a loved one were to be lost too early, hopefully you have already realized that the loss doesn’t automatically mean a reduction in lifestyle. It just means things will change.

How they change, and what decisions you have to make, depend greatly on who has died, and how their life intertwined with yours on a financial level.

How Can ULTRA-HIGH NET WORTH Families Prepare in Advance for a Tragic Loss?

First, you can plan for this possibility in your estate plan, before it happens. This is a loving thing to do, if you think about it, because what if you are the person who dies early, and you’re the one who handles the majority of the financial decisions in your family? Do you want to leave it to your surviving relatives to figure all this out?

But beyond that, you can also create an investment plan that incorporates the possibility of a loved one’s early death into its mechanics. At one level, this seems heartless. But again, just like including this scenario in your estate plan, building it into your financial plan is actually the more loving and forward-thinking choice to make.


Because as you have seen already, the tragic early loss of a loved one will upend almost all your lifestyle desires and financial hopes and dreams.

Regardless of who dies, wouldn’t you want to know that the remaining relatives will retain the same level of financial security and serenity they enjoy now? Wouldn’t you want them to continue to look forward to years of happiness with each other?

An unexpected early death falls into what we call a “What if” scenario. A ‘what if’ scenario is a major life event that greatly affects your portfolio and long term planning – for better or for worse – that you didn’t anticipate but that you know could happen, even if the chances are small.

Other what-if scenarios for high net worth families could be a surprising and costly medical diagnosisa divorce,  an inheritance, or a disruptive global economic event outside your control, [link to blog 39] such as the COVID outbreak.

No matter the specifics, the question facing every affluent family is the same:

What if I could remain financially secure no matter what happens in my life or my family?

How valuable would that kind of serenity be for you? More importantly, is it even possible?

As you will soon find out if you talk to one of our wealth managers, our financial planning process does far more than just allocate money across various investments and hope it’s good enough to get through life.

Here’s a quick look at what our process delivers for high net worth families:

  • Project your long term financial security based on known historical data
  • Rate the ‘comfort’ level of your portfolio based on the certainty of achieving your desired lifestyle outcomes
  • Modify your goals in response to changes such as a ‘what if’ scenario
  • Make immediate adjustments to your plan in response to unexpected life events
  • Preserve your long term financial security no matter what
  • Eliminate financial anxiety and uncertainty, even if a loved one dies too soon

We achieve this by using a customized planning approach. Customized means your plan doesn’t look like anyone else’s. It means you incorporate your specific lifestyle dreams and desired outcomes, your family situation, your complete financial picture, AND all the possible ‘what if’ scenarios we can come up with into your plan.

For example –

Suppose a spouse earns 70% of your family’s income, and then this spouse dies. That loss of income would normally be highly detrimental, even to a high net worth family.

If you have all your investments locked into high-risk, high-fee funds and unproven venture capital firms who are years from giving you any returns, the early loss of the breadwinning spouse will be catastrophic to whatever you had envisioned for the rest of your life.

Pursuing the highest possible gains, and not considering risks, loss of liquidity, and other factors, is an unwise and dangerous approach to financial planning, especially for ultra-high net worth families.

Our approach balances risk, performance, and lifelong security so you are as assured as possible that you will achieve your desired lifestyle outcomes – no matter what happens.

If a major ‘what if’ life event does happen, the customized plan we create for you can be easily adjusted – without compromising your long term security.

Would you like to see how we do that? Click the link below and talk to us.

Get an Investment Plan that Includes Key Life Events – the Predictable and the Unpredictable

Schedule a free chat with CEO and Co-Founder Hutch Ashoo