Quite often with couples, one spouse will take the lead with the finances, paying the bills, monitoring savings, and managing the assets or working closely with their financial adviser. Unfortunately, more often than not, that means the other spouse takes no interest. We’ve seen instances where a spouse attended a financial planning meeting but simply read a book and was completely disengaged from the meeting.
As financial planners, and fans of all things finance, it’s hard to believe how someone could be so disinterested in their money or the stock market; however, we realize it does happen. As investors get older, we often see that money matters become less important than during the working years. Life and family become a priority, so the spouse who is not in control may simply fall out of the loop when it comes to the household cash flows.
We believe it is important for both spouses in a relationship to take an interest and develop a fundamental understanding of your finances should something happen to the other spouse. It can be as basic as knowing how to pay the bills. We’ve seen instances where a surviving spouse didn’t know where the utility bills were being sent, if they were debited from a bank account, which bank account bills were paid from and even who the service provider was. With the continuous progress in technology, finding the answers isn’t as easy as going through the filing cabinet in the study. Bills are frequently delivered via email and paid online.
A trend we’re fostering with our clients is making sure both spouses are prepared to be in charge. They spend the time to build relationships with trusted advisers, including financial planners, money managers, tax consultants, insurance agents and estate planning attorneys, so should something happen to either spouse, there is a network in place to aid the surviving spouse.
The reality is that women outlive men by about seven years, so assuming a couple is close in age, the chances are good that a wife will live for a significant amount of time after her husband dies. According to the U.S. Census Bureau’s 2017 Current Population Survey, approximately 33% of women age 65 and older are widows compared to approximately 11% of men. Therefore, both spouses need to have an understanding on how assets are managed and how household money is spent. While you don’t need to know how to run long-term projections or comprehend the minutia of stock P/E ratios, you should still understand how your finances work and who to contact.
It is very difficult to learn the ins and outs of your financial plan from scratch when dealing with a grieving process. Planning for the unexpected is preparedness, so the sooner you start to plan for the incapacity or death of one spouse, the easier adjustments can be made. Should you find yourself widowed, the financial goals you had before may have changed, so your strategy may have to adapt to your new circumstances. While it is never too late to plan, the sooner you can have a plan in place, the stronger the plan will be.
If you have questions regarding your preparedness for the loss of a spouse, the experts at Henssler Financial will be glad to help:
- Experts Request Form
- Email: experts@henssler.com
- Phone: 770-429-9166.
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