“Teach Your Wife to be a Widow”

A wise old life insurance agent I knew used to say that to all his of clients.  It was common years ago for the man of the house to handle the financial affairs and tell his spouse, “Don’t you worry your pretty little head about it”.  Sadly, we still see this too often in our practice. Over the years, the husband has built a web of financial products, real estate holdings, taxable and pre-tax accounts, and assorted advisors.  Through lack of interest, financial education, or even awareness of these accounts, the widow is unprepared for the overwhelming task of sorting it all out in the midst of her grieving.  At such a difficult time, she is particularly vulnerable to mismanagement, bad information, and even predatory sales practices.  The stress and irrevocable mistakes that follow are certainly not what the husband wished for his mate.

Times have changed and the number of women who participate in, and often control, family finances has increased dramatically, but the underlying message still rings true and applies to all families in one sense or another.  Who pays the bills every month?  Does the other spouse know where to find account and log-in and information?  Have beneficiaries been updated and do they accurately reflect your wishes? What accounts are joint vs. individual? Does the surviving spouse know how to handle the finances on their own? Have you planned for the possibility of your surviving spouse being incapable of making good decisions or maintaining real estate?

Photo via Visual Hunt

Contrary to popular belief, a will often isn’t the deciding factor in how certain assets are distributed.  In addition, settling an estate through probate is expensive.   Do you know the impact of passing on your accounts, either to a spouse or child?

Make the conversation about your finances an ongoing dialog, even if your spouse would prefer not to deal with it.  If appropriate, talk to your children as well.  At least make sure the family knows where to find all the details when the time comes.  Better yet, introduce your spouse and children to your financial planner.  Establish that relationship before something happens so they’ll know who to call and take comfort in the knowledge that a comprehensive estate plan has already been put in place.

Brian Bowen, Financial Planner