Managing the finances of a single individual is a challenge any day of the week. Imagine how complex it can be when a nuclear family or several generations come into play. We are all creatures of habit.

Many of us find it extremely difficult at the end of the day to take care of financial tasks, so we don't. They just get put off, sometime inevitably.

Consider the real-life scenarios described below. Note that these cases are drawn from actual case histories (names, places and circumstances have been altered) of my former financial services practice, but let me politely point out, they apply to local residents in Bermuda, too.

Real-life case number one: XYZ company is a good stock, the lady says. My father and I owned the shares together, but he let me have all the dividends. They paid consistently and I used the money to buy our kids things. She is now elderly herself and wants to sell the shares now to take advantage of a three-year high in market value.

However, not only are the shares in certificate form but - surprise - they are still registered in both their names. Her father has been deceased for 25 years and, today, the XYZ share value is dropping like a stone. It takes eight months to obtain a certified death certificate and re-register the shares in her name alone. Needless to say, XYZ stock does not sell for the value she had hoped.

Real-Life case number two: I am a tiny sewing machine store (no, not my daddy's) in the United States getting some repairs done. The dear couple running the place have worked all their lives, managing to compile an extremely modest savings account and a few investments. The husband looks terrible. When the wife is out of the room, he leans over and whispers to me: “I know you work with finances. I can't find our stock certificates and I think I burned them by mistake with the trash in the wood stove. I am just sick about it, I can't sleep, and I can't tell my wife. What am I going to do? It is all of our savings!

Real-life case number three: The client comes into our office seeking tax advice on a lump sum distribution from a pension account.

She is 56, has scarce resources and is recently been made redundant.

The reality is in today's marketplace, her future employment prospects are bleak.

She chatters on about what a ‘getting' this unexpected money is.

It seems that her ex-husband - from whom she has been divorced for more than eight years - has just died. He never removed her name as beneficiary of his pension. Thus, under contract law, she inherits and his current spouse is left almost penniless!

Real-life case number four: Betty is 55; John is 58. They live in a home owned jointly by him and his family. They have put 35 years of sweat equity into the place with the understanding that they will inherit when the matriarch of the family goes to glory.

His mother, who is 79, has not been well; cancer treatments are eroding her health. Betty, who has never worked, has spent emotional and physical time caring for his mother at home. Unexpectedly, John, not Mom, passes away.

At the reading of the will, he has bequeathed his joint holding in the house to Betty. Surprise, title was never conveyed to him by his mother. Not only that, but the matriarch's medical bills are mounting and the home will be sold. After 30 years of being a homemaker with little in the way of marketable skills, Betty must simultaneously grieve; find a job, and an affordable place to live.

Four cases, four avoidable tragedies. We work so hard to acquire assets and establish the good life, but never quite finalise the details. Why is it so difficult for so many of us to take care of these most necessary financial tasks?

Not only do people neglect to make wills, but they forget they own stock warrants and options which end up expiring on them. They earn pensions in other countries and can't remember how much it is, let alone where to claim what they are rightfully due.

They make ‘handshake' business agreements with family members (and other people), then never put anything in writing. They loan money to others and never collect. They get dividend cheques and lose them. They marry and divorce, never once reviewing life insurance, pensions, wills, annuity contracts and bank accounts for correct ownership.

They stop making payments on life insurance policies, with no idea if the contract is a whole life or term policy.

They never check their property insurance to see if the face value of the policy will remotely pay for replacement cost if the house falls down.

They open accounts abroad, and forget how much, where they are, and tell no one. They forget to file income tax returns. They set up trusts, and forget to transfer assets into them. They buy investments, have no idea what they bought, letting their broker choose for them. And the list goes on...

One can try to blame universal financial systems for the indecipherable language, complicated, lengthy, and tedious forms, wending the maze as it were.

The reality is that we live in a complex world. It is just not easy no matter how you view it. We are ordinary people and have an excuse to feel overwhelmed, but once committed we buckle down and just do it.

But what ever happened to people like Princess Diana, who had access to the most brilliant estate planning minds in the Commonwealth?

Most of her ?21.5 million fortune was bequeathed to her sons, Princes William and Harry, in trust, but she failed to make a new will after her divorce from Prince Charles, leaving her sons with an ?8.5 million inheritance tax bill on her estate.

Next week we discuss organising your financial affairs. You may not know any more but at least you can find them.

@EDITRULE:

Martha Harris Myron CPA CFP is a Bermudian, a Certified Financial Planner (US licence) practitioner and VP, personal financial services at Bank of Bermuda. She holds a NASD Series 7 licence, and formerly owned a US financial services practice meeting the needs of 400 individual and corporate clients. Confidential e-mail can be directed to marthamyron@northrock.bm

The article expresses the opinion of the author alone, and not necessarily that of Bank of Bermuda. Under no circumstances is this advice to be taken as a recommendation to buy or sell investment products or as a promotion for financial plans. The Editor of The Royal Gazette has final right of approval over headlines, content, and length/brevity of article.