Couples can alter some of the burden on a surviving spouse by discussing important financial matters while healthy and able to communicate. As a widow myself, I have firsthand experience of the financial burdens that come after the death of even the most prepared spouse, during a time when grieving is at its deepest. These topics can be difficult to bring up, but the peace of mind that results from a fruitful discussion and action plan is a relief when finalized.
Here are some of the basic “to-dos” that should be done as early as possible in your planning:
–Compile the contact information for lawyers, your accountant, and other financial professionals that both spouses use.
–Locate and store important documents such as passports, insurance policies, estate documents, deeds, title papers, social security numbers, contact numbers for the people above, and important account statements in a fireproof, secure box where both parties can easily get to it.
–Share a master list of username and passwords to important accounts- either locked in the secure box mentioned above or held in a safety deposit box.
–Check that all beneficiaries on your IRA, 401K, pension, life insurance are listed correctly.
–Check your credit card accounts! If you do not have joint accounts, but instead each of you are authorized users on each other’s accounts, you will have issues. If one of the spouses is an authorized user on a deceased account holder’s card, that surviving spouse is not able to legally use the card. Make sure each spouse has at least 1 card in their own name or that at least one of your “joint” cards is truly set up as joint accounts and not just “authorized users”. Having a credit card you can use in the immediate aftermath of a passing is critical in bridging the gap between when insurance money is paid and affairs are settled.
–Make sure you have health care powers of attorney for each of you. This person can make medical decisions on your behalf when you are not able. Also, a living will lets the doctors know what you want done or not to prolong your life. Contacting an attorney familiar with estate planning can help ensure you have the right documents for this circumstance.
— Name a financial power of attorney in case you are unable to make money decisions. This can be your spouse, or someone else you trust, but if you are unable to make money decisions for yourself and you have accounts that are not joint accounts, your spouse will need to keep things going for you while you are incapacitated (i.e. make car payments, mortgage payments, payments for your business, etc.).
–Make sure your will or trust is current. Review every few years or after any major changes in your life such as the birth of a grandchild or child, a divorce or move out of state or even if you win the lottery!!
–Know what your partner wants for funeral plans. Is cremation an option, simple vs lavish?
–Both parties need to know how bills are paid so payments are timely and nothing is overdrawn. If you haven’t already shared responsibilities for bill paying, make sure the spouse primarily responsible for bill paying has provided the necessary information (what gets paid, when, and how) to the other spouse.
These topics often come up this time of year when families are together for the holidays. Whenever you chose to have the discussion don’t wait too long and then be saying “I wish I had talked about ….”