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Author: SisypheanFool Big red star, 1000 posts Old School Fool Motley Fool One Everlasting Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 5748  
Subject: Re: Help For A Friend Date: 7/8/2005 5:21 PM
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I am sure you understand that since she is a friend who has just gone through a tremendous loss I do not want to lay into her. One thing at a time.

Agreed. However, keep in mind that even in grief, there is a capacity to focus on things. In fact, something like this may just be the distraction that she may be looking for to occupy her mind.
Myself, I found that there were new things that I had a capacity to be extremely focused and other, simple and rountine tasks, that I was an absolute basket-case and floundered.


From the OP:
He had life insurance so she now has $750,000 sitting in an account.

Maybe this can be a starting point.
If she placed these funds into an account, then I'd be certain that she had to apply a SSN to this account. So, the funds can be traced from here on out anyhow.
At this point, I'd at least flag, to her attention, that she should at least spread this out across a few different institutions. If she has this all stashed in an account at one bank, that account's FDIC insurance is only protecting $100k of it.

As Hedge noted, she needs time to sort things out and learn. So perhaps the best thing for right now is to spread the funds across several MMAs. I can think of 4 banks off the top of my head that are yielding 3% or more - which exceeds the yields on 12-18 month CDs - check bankrate.com for rates on both MMAs and CDs.
This will at least keep the funds insured and yielding something on pace with inflation. Thus giving her a year or so to get through the initial wave of grief, to learn and plan.
She really needs to avoid the quick-fix solution of trying to name her kids as joint tenants to increase the FDIC coverage. POD would be the better way to title the accounts for now.
She'll also need to realize with this windfall that she needs to update her own estate plan - probably something more urgent than figuring out where to invest the funds.

The harder thing to convey, which Hedge touched upon, is the drive towards irrational spending. When we're hurting, we're even more susceptible to buying things that we think will make us feel better now. It's hard enough to discern if one is 'taking action' vs. 'reacting' in the best of times.
Even worse is that there are those that are very parasitic on people in her position.

Best wishes for you friend. She's lucky to have someone keeping an eye out for her interest in her hardship.
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