Planning Your Finances For The Future

An important conversation to have before it’s too late: what happens if the partner who handles the bulk of the financial responsibility passes away before the other? It’s a topic that most people don’t want to talk or think about; however, it’s one of the most important financial discussions you should have with your spouse.

A colleague on LinkedIn (thanks Brandon Chapman!) recently shared an article titled: “How to avoid financial deadlock- or worse- after one spouse dies” (written by Cheryl Winokur Munk, link below).  We wanted to share a few of her great tips & advice for avoiding complications if the more “financially dominant” partner passes away first. 

  • Prepare a Go-Bag. According to Cheryl: “Financial advisors say this should include a comprehensive list of all financial contacts, advisors, attorneys, accountants, insurance professionals, and copies of beneficiary designations. The financially savvy spouse should also prepare a written list or spreadsheet of the couple’s assets and liabilities, including digital assets and passwords to these accounts. The spouse should also note the location of financial records including insurance policies, wills, and trusts.” It’s so important that both partners know exactly what is going on with all aspects of their finances, where all their money is, and how to access it.
  • Keep the “Non Financial” dominant spouse in mind. This means making sure that all the information is recorded in a way that he or she can easily understand, especially since they will most likely be emotional and under a lot of stress. 
  • Do a Trial Run. A source in the article, Joan Crain, suggested: “If possible, it’s a good idea for the less financially involved spouse to meet key advisors and perform some of the ongoing tasks such as bill paying, reconciling statements, and renewing insurance policies for several months.” When the less dominant partner is “trained” on how to do all these financial tasks step by step, it will make the process easier when they have to do them alone. 
  • Pay attention to income and expenses. Create a spreadsheet or list of all income & expenses, and how the death of one partner would impact the flow of money in & out. What changes would need to be made, if any? 
  • Don’t make sudden moves. Probably one of the most important, and often the most common mistake made. Don’t make any big decisions immediately following the death of the spouse, especially without the consult of a very trusted advisor. This is one of the most likely times to fall prey to a scam or be taken advantage of financially.

As much as this is a difficult subject to think about, it only takes a bit of planning to have these measures in place. Checking back, perhaps annually, to ensure everything is up to date is also a good idea. 

Cahill CPA helps many clients in wills & trusts situations, and we also have extensive experience in estate planning. Meet with us if you have any questions about the future of your family’s finances. We would be happy to provide information, advice, and refer you to any necessary financial or legal advice if needed. 

Link to Original Article: How to Avoid Financial Deadlock-or worse- when one spouse dies. By:  Cheryl Winokur Munk


Blog post written by Crystal Cahill

Cahill CPA- North Vancouver

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