Planning for Major Life Transitions:

The Challenge of Change Management AND FINANCIAL TRANSITION PLANNING AS A SOLUTION One of the biggest challenges Clients face in transition can be summed up in two words: Diminished Capacity. Let’s look at how Diminished Capacity affects us and how to handle it in a healthy manner. Physical Ailments Stress prompts the secretion of the hormone cortisol. Small increases of cortisol can actually have a positive effect on the body and the brain during short-term events. It provides a quick burst of energy and a lower sensitivity to pain that might be necessary during a fight or flight response. As long as there is relaxation following the stress, body and brain function return to normal. However, the higher and more prolonged levels of cortisol released into the bloodstream with little or no relaxation in between due to chronic stress can be debilitating. The negative physical effects can include: fatigue, sleep deprivation, blood sugar imbalance, higher blood pressure and a decrease in overall immunity. Chronic stress affects the brain by interfering with neurotransmitters, which causes problems with memory, shutting down learning, damaging brain cells and creating anxiety attacks. Our ancient reptilian brain shifts into short-term survival mode, perceiving the stressful situation as immediately threatening, without the luxury of longer-term, rational, creative thinking. Psychological Challenges When the ancient brain experiences extreme change such as a Sudden Money Event (SME), cognitive abilities, coping skills, attention span and memory are all compromised. It’s simply not a good time to make critical decisions that can influence your well being or impact the rest of your life (especially major financial decisions). People undergoing a Life Transition Event (LTE) may also experience irrational or exaggerated thoughts, with their sense of self and identity suffering. In addition, grief, exhilaration, paranoia, fear and a distorted sense of empowerment can arise and have a long-lasting impact. When you have difficulty thinking combined with overwhelming emotions, you can easily miss the warning signs of trouble ahead. As a result, your passage can take longer and become even more stressful than it otherwise would have been, leading to less than desirable outcomes. Social Upheaval During times of transition there can be a loss of social footing because the status quo is gone, and it has yet to be replaced by a new norm. Comforting family or community support systems may have disappeared, but the range of new possibilities may still be unclear. Time can be marked by a shift in boundaries, both personally and financially. Your world may be getting bigger with more or less accountability than before. Or perhaps your world is getting smaller and you have fewer options. Changing your norm can be unsettling at best. Social distortion, isolation and conflicts with friends and family due to changes in circumstance are all common, and are rooted in questions such as: How do I set healthy financial boundaries with my friends/family? How will I know if someone likes/loves me for my money and not for who I am? How do I live my new life as…(a widow, ex-professional athlete, lottery winner, etc…) How can I find meaning after having worked full-time for 45 years? The Solution: Financial Transition Planning When life is changing, many people seek professional advice. They go to attorneys, accountants, financial planners and therapists…all of whom have clear and specific protocols for dealing with clients. But if you don’t understand the experience you’re having, and the professional you enlist already has a protocol, you can be mismatched. The particular change you’re going through should drive a shift in how a professional guides you. Unfortunately, both financial advisors and the people who hire them have historically underestimated what is going on in the case of Clients going through transition. The Sudden Money Institute is the first organization of its kind, made up of professionals who synthesize decades of experience in financial planning with cutting-edge research in neurology, sociology and psychology. We have developed a process that transcends those fields of study by integrating their technical aspects with the human experiences of someone in the throes of transition. The best time to start financial transitions planning is when a LTE or SME first occurs, or is first identified. Waiting until "things calm down" may feel intuitive, but a wide range of regrettable decisions may be made and some may be impossible to unwind. This is a time to minimize the confusion and proactively manage the challenges surrounding these events. It’s the time to create a safe space and make decisions, one at a time.