August 31, 2016. By Jennifer Wolfsberg:
The thought of losing a spouse is overwhelming. The life you have envisioned is suddenly upended, and the dream of growing old together is no longer in your grasp. When such tragedies occur, the spouse left behind is not only overcome with sadness, but is also saddled with the responsibility of organizing finances and estate documents. Unfortunately, many families rely solely on one person to manage the family finances, making it all the more difficult when it is this person who passes. To avoid this risk it is critical that couples share the whereabouts of accounts, policies, logins, and professional relationships while still well. Furthermore, it is critical to ensure the each spouse understands the importance of these items. Here are the key estate planning and financial matters we recommend you review with your advisors and loved ones:
Estate Planning Considerations
Contact your estate attorney to ensure your estate documents are up to date. Your estate attorney should receive an updated accounting of all of your assets and how each is to be titled. Share your current situation for recommended amendments. Over the last several years there have been many changes in the requirements and details of the wording on estate documents, therefore confirm with your attorney they are in line with the current requirements. Keep copies and originals in reach, especially health care proxy and power of attorney.
Financial Planning and Your Advisor
If your family works with a financial advisor, share with them the current health issues. Request a meeting to outline all the accounts, assets and specific titling of these assets, and ask if they are familiar with the estate settlement process. Are they willing to work with your estate attorney to assist in any re-titling or asset transfer process? What funds upon the passing of your spouse will still be readily available and accessible to support your household and living expense needs? Does this change your investment strategy? We also recommend that you review your insurance policies as well as your access to their benefits. Do you have independent insurance policies, or are they through your spouse’s or your employer? If they are independent, do you have the original policy?
Household Financial Management
Create a spreadsheet of all major household bills including method of payment. Start with what you can see, i.e. mortgage and cable, then move on to annual expenses such as taxes and insurance. Creating this checklist will also help friends and family support you with such administrative items. Online banking and bill pay passwords should also be logged to manage online presence. Many not only have online banking passwords, but also online shopping and payment methods linked to credit cards, such as Amazon or ApplePay. We have seen several accounts remain open and tied to credit cards without a spouse realizing this for many months or years.
Those grieving need a cohesive team of family, friends, and advisors who can take on a greater role by shouldering stresses. If you or a loved one are approaching or experiencing loss, we highly recommend using The Children’s Room as a resource. The Children’s Room is a grief support center operating under the mission that no child, teen or family should have to grieve alone.
Detailed preparation and planning during a time of illness, while incredibly difficult, can help the surviving spouse avoid compounding grief with a financial disaster. Please do not hesitate to reach out to our office if you are in need of a referral to an estate attorney, CPA, insurance provider, or if perhaps you would like to learn more about financial planning at Centerpoint Advisors. Nothing can completely erase the magnitude of the loss of a spouse, however financial and estate planning are tasks you will be happy to have completed once the dust settles and you are ready to move on to emotional healing.