The situation

One of your wealthy clients tells you her company downsized and she lost her job.

She wasn’t given much advance notice, so she’s in shock.

She wonders how she’ll pay bills, and is worried about her future.

How can you help?

She’ll need time to process what’s happened, so schedule a meeting in a couple of weeks to review her portfolio. In the meantime, she and her spouse should discuss their combined financial status. Tell her to bring all information, including pension documents and banking statements.

Since she was with the company for 25 years, and a six-figure earner, she got offered a severance package. But before she signs, tell her to review the document with a lawyer to confirm she was given what she was due. There may be room to negotiate the employer’s offer.

Conversation starter

What are your new
career priorities?

During the meeting, examine her tax considerations. She’ll need to decide if she wants to take her severance as a lump sum, or through scheduled payments. The latter are usually better for tax purposes.

She may want to know which assets are liquid and what she can pull money from. Speak with her accountant to see what would have large tax implications if sold, such as her share of the family cottage or a timeshare in the U.S.

Here are some questions to ask when you meet with her:


Were you wrongfully dismissed?


Why’d they fire you?


What are your “need” expenses and your “want” expenses?


How can we slash your expenses in half?


How are you doing with all this change in your life?


Have you lost weight?

If her income is low enough that she owes no tax, there may be certain items her spouse should start declaring on his tax return, such as charitable gifts.

Also, she may be upset if she was fired, and want to sell her company stock. Make her aware this could push her into a higher tax bracket. Check with her accountant, and if the stock’s holding its value, point out there’s no better revenge than to have her former employer fund her retirement.

She may also feel like she’s lost her professional identity, daily routine and sense of security. This could affect her emotional and physical well-being. Suggest healthy ways to grieve, such as logging her thoughts and emotions in a journal. Be a resource by referring her to a recruiter or someone well-connected in her field.

Tips for an upbeat job search

  1. Create a plan on how to start your search, including connecting with a job recruiter.

  2. Keep a regular routine that includes meal times and exercise.

  3. Stay positive by focusing on what you can control, like preparing for interview questions.

  4. Avoid the tendency to withdraw and isolate yourself.

  5. Catalogue your strengths.

  6. Read those books you’ve been piling on the nightstand.

Originally published in Advisor's Edge

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Hi there, thanks for your comment. We’ve clarified the story to state that the wife would no longer owe tax due to her lack of income.

As you note, the magnitude of the charitable donation tax credit is based on the amount of the donation and does not change based on a taxpayer’s income.

We appreciate your careful readership.

Thursday, May 15, 2014 at 12:55 pm Reply


Why would you recommend transferring charitable gifts to husband’s return just because spouse is in lower tax bracket? Is the charitable donation tax credit not the same for all taxpayers no matter what their tax bracket? (Aside, of course, from an individual not being taxable at all … but that is not what is implied here with reference to being in a lower tax bracket, not to being non-taxable).

Friday, May 2, 2014 at 1:44 pm Reply