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How to Prepare for the Death of Your Spouse

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Who pays the bills in your house? Our house isn’t much different from most households around the country. I’m the financial person in the family so I handle all financial matters in our home including paying bills, watching all of our accounts, managing our investments, and corresponding with people regarding financial matters. My wife barely knows what comes in and goes out.

The Suze Ormans, Dave Ramseys, and Clark Howards would probably say that each person in a marriage should take an equal part in financial affairs of the household but over the years I’ve talked to a lot of people and I haven’t found many of my friends that operate differently than my house. Maybe you and the people you know are different but managing the complicated maze of household money isn’t easy and two people can make it more confusing.

That isn’t to say that my wife doesn’t have total access when she wants to look at the accounts but a few years ago I started thinking about the fact that none of us are guaranteed a tomorrow and what if something happened to me? Would she know where to start when she was thrown in to being the financial manager of the house? Because of that, I put the information together for her. Here’s what I gave her.

The Basics

I started by placing a file on our home network that contains the complete contact information for every financial institution that we interact with during the year. That includes name, address, and phone number for each. If we have a person that we deal with, I included their name and extension. If we have online access (nearly all do) I included the user name. I also update that file with any balances owed or deposit accounts.

There is a companion file that I gave to my mother and sister as well as my wife’s parents that has the account numbers for each of those accounts and the passwords. I do this so that all financial information isn’t in one place. My wife knows that in the event something would happen to me, she and our family should meet to combine the files.

Investments

My wife doesn’t have a lot of interest in investing so that task is left to me. I handle all of our investing matters but if something were to happen to me, I have an investment adviser, someone I know personally, ready to take over. My wife knows him and knows to contact him if something happens.

She also knows the basics of our accounts. She knows that if she needed money for something she should take it from our brokerage account rather than our IRA. My wife is a career professional who has, what would be considered a professional level job but when making these plans, the fact that she is highly intelligent and could probably figure everything out is unimportant. I treat her like she knows nothing in order to cover everything and I know that her mind won’t be operating as well as it normally would during this time.

She also knows about our life insurance policies and how to start that process if something happens.

Documents

Documents like tax returns are all scanned and kept in a password protected directory with my family and on our home network. She knows how to get to all of that. Any piece of paper that holds importance has been scanned and shredded unless the original has to be kept.

Bottom Line

It may sound a little complicated but she only has to remember a few steps to get to everything she needs and I have instructed my family and her family on how to do this in case she isn’t in a mental place to take care of things and of course, anything about her that I need to know if something happened to her is in my possession.

We don’t want to think about things like this but planning for the worst makes the worst easier to navigate should we be faced with it.

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13 Responses to “How to Prepare for the Death of Your Spouse”

  1. Martha says:

    Do you have a plan for what would happen if both you and your wife were killed? It’s a bit tricky since all of your financial data is in a couple of places, would your family know what to do?

    This is a great topic. I’m glad that you are writing about it. I know that I don’t like to think about what would happen if my husband were to die but it is important to prepare for even the worst of tragedies.

  2. James says:

    Far too many times one spouse handles all the finances and if that spouse dies first, the other spouse is left clueless on how to proceed with the finances.

  3. mjac522 says:

    Great article! Also don’t forget to check and double check beneficiary information on all of your contracts. Especially if you are recently married. Most people tend to list their parents, siblings etc… as beneficiary up until the point they are married. Update them and keep copies of the paperwork!

    • Martha says:

      My HR made me change all of my beneficiary information when I got married; or have my spouse sign a “notice of consent” form so that he would know if I had someone else other than him as my beneficiary.

  4. Shirley says:

    I manage the finances for our family and 99% of it is online. Everything is well documented on my computer, kept updated, and backed up in three places.

    My husband does not use a computer :-( so I keep the paper statements coming, in addition to the online statements, since he would certainly be lost without them.

    I also keep a copy of my finance folder and all pertinent information on a thumb drive with my daughter who would be quite willing and capable of handling the details for him. She could even do this from her own home and is also the second beneficiary on all financial accounts if we should both die.

    While it’s certainly unpleasant to think about, planning for its possible happening is not something that can be ignored and it is not an insurmountable problem or solution.

  5. ChimChim says:

    Solid idea. Although I manage our finances, my wife is involved from a strategic perspective. She is also an internal audit professional, so even if she was not privy to the daily finances she can easily find out through an extensive audit. If she can audit billion dollar global firms, she can audit our finances.

    Nevertheless, both spouses should be engaged in home finance that share a specific strategy and long term goals. We saved over $100K last year through effective planning while at the same time maximizing our 401K and other investments. In fact, we meet every week on this topic to review progress and ensure our finances are on track.

    Also, we do not buy any item valued over $100 USD unless consulting one another. I know that may be excessive, but we are nearly in a position in our early 30′s to quit work for 5+ years if we wanted. We would never quit our jobs, but the feeling is priceless. It just makes work easier to deal with knowing you can say, ‘the hell with it’… So many people we know are tied to their jobs due to overspending caused by poor planning and its too bad.

    Btw, we both grew up in very modest household (no silver spoon here), so we know the value of money. Our next step is to move $$$ offshore – safer.

    Best

  6. Great article which provides some great food for thought. It is easy to get caught up in the minutia of our daily lives. With many families having two wage earners and managing the day to day necessities of the family, it is easy for things like this to be overlooked.

    Make sure you have a plan and that all documents are up to date. As Mjac522 indicated, make sure all your beneficiary information is up to date for each and every asset, investment and insurance policy that you own. Also make sure that you have your Wills and Living Wills (or advanced directives) current as well. People don’t plan to fail, they often fail to plan. Don’t let that happen to you.

  7. Derek says:

    This is a great subject and I think it’s critical for every family to plan for the unexpected. I too think that most families have one spouse that takes care of the bulk of the finances. So, it’s important to have a plan in place in case something does happen.

    I have compartmentalized everything in a loose-leaf binder for my wife (a binder makes it easy to make changes and updates). First, I have a “Letter” written to her (or anyone else if we both die) providing some simple instructions. Next, I list all of the important contacts (attorneys, cpa, advisors, etc.). Then, I provide a copy of our trusts and wills. Fourth is a listing of all accounts and our net worth or bottom line (along with a list of expenses). Finally, I provide a copy of our recent tax return, our insurance policies and all of the other important information that she may need. I call it our Home Financial Management Binder and it gives her a peace of mind knowing that she won’t be completely lost if something happened to me.

    Great Post!

  8. Charity says:

    Excellent article, Jim. When my first husband passed away suddenly in the late ’80s I was deeply grieved but was not confused. It was only the day before he died unexpectedly that I had made a copy of form from the end of a booklet I had just read entitled, “How to prepare for the death of your spouse”. Needless to say it was not filled in. Thankfully we alternated managing the finances every 6 months and everything were filed. As a result, I only had to let my fingers do the work in the files and I was on my way. It was a blessing to know that my grief was not confused with confusion and stress because of disorganization. So thanks again for excellent article. A word to the wise is sufficient.

  9. Yeni, RN, ASN, BSN, MSN says:

    Dear Jim, et al.

    Do not forget to prepare a living will, Durable Power of Attorney, Health Care Proxy, Advanced Directives, etc. Aside assuring one’s finances, it’s vital to ensure that when one’s significant other or family member is in his/her death bed that such documents are available…. I work in ER & often family members (e.g., wives/husband, domestic partners, etc.) do not have such documents and it becomes a horrid situation when the patient is hanging on to life by a string… sometimes it is best to let these patients move on as their quality of life will be suboptimal (e.g., brain dead)…. Aside, assuring financial intelligence, please suggest end-of life health care directives.

  10. saladdin says:

    Get an alibi………….


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