Your 5-Step Financial Transition Checklist

As a CERTIFIED FINANCIAL PLANNER™ professional and former therapist, I am all too
familiar with the hurdles, challenges, and transitions — both expected and unexpected --
people face throughout life. Much of my practice is focused on helping people of all ages and
from all backgrounds in negotiating jarring life events, from the traumatic loss of a spouse or a
divorce to an exciting job promotion or retirement arrival. Whether positive or difficult, the
experience of crossing over to the unknown can be disorienting, no matter how organized or
confident you may be.

While transitions are difficult, there are a few ways you can make the process smoother and
less challenging. By following these five steps, you’ll have a better chance at crossing the bridge
and making a successful life transition.

Be Clear in Your Intentions
Planning and consciousness are the two key ingredients for successfully surviving a major life
shift. You have to know what your goal is and then create a plan on paper for how to get there.
The best plans have a specific goal in mind. Saving more money or retiring early won’t do you
much good when creating a financial plan. Before you can implement a strategy and start
making a transition, you need to know what you want to accomplish. Not sure how to formalize
your goals? Speak with a financial advisor. Once he or she understands your current
circumstances and needs, you can work together to identify realistic and concrete objectives,
whether that’s retiring at age 60, saving up for a year-long world travel adventure, buying a
second home, or maintaining your current lifestyle post-divorce.

Have a Backup Plan
A flexible plan and an emergency reserve go hand-in- hand when it comes to feeling confident
and at peace with your financial roadmap. As explained earlier, change can happen at any time
and, often, these life changes affect your finances. Perhaps your child decides to attend a
private university instead of a state college that provided a scholarship. Or, maybe you or your
spouse has to take time off from work due to a disability. It could be your financial priorities have
changed. Regardless of why it’s important to have a financial plan that’s robust enough to
endure changes but flexible enough to adjust when needed. And an emergency reserve can
help fund any unexpected expenses.

This is one reason why it’s important to build a long-term relationship with your advisor. As your
situations change, your advisor can help you reevaluate your investment portfolio and strategy
and determine whether or not they need adjusting.

Prepare for the Inevitable
We can’t predict most things in life but, we do know everything eventually comes to an end. As
we age, we may fall ill or incur a disability, and eventually, we all die. Perhaps because of the
grim nature of this conversation, too many people have yet to draft or update their legal
documents, such as their will and estate plan. By waiting too long, you could put your family and
beneficiaries in a tough situation. Make an appointment with your attorney or estate planner to
review or create your will, assign health care directives, name a power of attorney, and review
your beneficiary designations. Being prepared can help you feel much more confident knowing
that your affairs will be handled more smoothly and that you can leave a legacy to your loved
ones.

Hope for the Best, Plan for the Possible
Most of us don’t purchase auto insurance because we anticipate crashing, nor do we buy house
insurance because we expect an accident. Insurance is designed to protect ourselves, our
property, and others in case the worst should happen. Too often, men tend to be the financial
managers of their household. When widowed or going through a divorce, women may have
trouble finding out what policies their family has and what they need now in their new situation.
This can be challenging and overwhelming, especially during a time when they are already
mentally and physically devastated. Regardless of whether you or your spouse was the financial
manager of your household, it’s essential that both of you get on the same page with your
accounts, assets, debts, cash flow, taxes, and insurance policies. Establish relationships with
your tax professional, attorney, and financial advisor to help in each area.

One of the simplest ways to help alleviate this stress is to take charge of your future and
potential accidents now. From auto and home insurance to life and long-term care insurance,
evaluate the options available and what makes sense for your situation. Even if you don’t end
up having to use certain policies, you can feel much more confident knowing they’re there for
you, just in case.

Take it Slow
The only sure thing in life is uncertainty. If you find yourself caught in the powerful currents of a
major life event, you may flounder. Or if you find yourself with money and freedom to which you
aren’t accustomed, you might get carried away with the exhilaration of the ride. Transition
experts recommend that you relax and take it slow. Give yourself time to digest the changes
before making substantial commitments or adding on more changes like creating a new lifestyle.
Use the resources you developed in preparation to handle immediate necessities, such as filing
insurance claims, probating an estate, or transferring or opening accounts.

Simultaneously, take good care of yourself physically, mentally, and emotionally. Your mind is
already busy enough during times of transition rearranging things and looking for possible
threats. We may not be aware of this happening in our minds, but nonetheless, they consume a
lot of our brain’s processing capacity. Avoid any overly taxing tasks and let your mind do its
work. Do the things you enjoy to create some mental space, whether that’s exercising, cooking,
or gardening.

Next Steps
With these five steps under your belt, you are well on your way to transitioning through one of
life’s many changes. Refer back to these steps as you progress and, if you know someone else
experiencing a transition, share this with them. And whenever you, or a friend or family member,
needs to speak with an advisor with an open ear, don’t hesitate to call me at 817.744.8450 or
email me at tom@teaktreecapital.com.

Tom Chancellor is a Certified Financial Planner Professional helping clients enhance their financial peace of mind. Tom spent 20 years as a marriage and family therapist and now incorporates resources from psychology, communications, and relationship studies in financial planning for people who experience life-changing events. Tom helps his clients and other financial professionals respond to life transitions such as divorce, death of a spouse, retirement, receipt of an inheritance and legal settlements. Contact Tom with questions at tom@teaktreecapital.com.
 
Securities offered through Comprehensive Asset Management and Servicing, Inc. (“CAMAS”), 2001 Hwy 46, Ste. 506, Parsippany,  NJ 07054,1-800-637-3211.  Member FINRA/SIPC. Teak Tree Capital Management, LLC,  is independent of CAMAS.