In 2008, Mary got news no spouse wants to hear. Her husband of 20 years, Bob, had experienced his first heart attack at the age of 40. Bob had a strong will to live and was determined to change his lifestyle and get in shape. He succeeded in both! However, four years later, while exercising, he suffered a fatal heart attack. Mary knew how to raise kids but did not know a stock from a Money Market account.
When Bob died, Mary lost not only her best friend but also her financial caretaker.
If you’ve lost a loved one, you know that it’s an emotionally draining, exhausting experience. Mary could barely think straight. She says that she was in a fog for six months, operating on autopilot. The problem is, life didn’t stop for Mary.
She had to notify government agencies, fill out paperwork, legal file documents, deal with insurance companies, run Bob’s business, and pay hospital and doctor bills, and still take care of the kids. The financial decisions didn’t simply go away. In most marriages, one spouse tends to handle the finances more than the other. While Mary paid some of the bills and was always part of the big financial decisions, Bob enjoyed investing their money and running a very successful business. Mary’s job was to run the family.
Fortunately, Mary knew enough to have a basic understanding of their financial situation. And Bob left everything in good order so that Mary knew where to find the documents and records. That’s far better than many people in her situation. Dealing with financial affairs is not something everyone finds manageable. For the uninitiated, suddenly being responsible for such matters is very difficult. The task becomes monumental when you’re deep in grief with your head in a fog.
Being able to locate everything is only the first step. As Mary explained, “I knew every professional Bob dealt with, and I knew where everything was… But I didn’t know what to do with it all!” Even with the help of all the professionals, she felt overwhelmed.
Mary handled the estate like it was a job, committing several hours every day to work on it. Even with qualified assistance, it took her more than a year to get the family’s investments in order.
Family emergencies are blind-siding. While we all hope for the best, it is critical to ensure you are ready for the worst.
More than 1 million Americans lose their spouses each year. Sadly, at some point down the road, you’ll likely experience what Mary went through. If you’re managing your own money, it’s crucial to be prepared for the unexpected. What you need is a plan. While you may have the experience to manage your family’s money, your spouse may not. That could put everything you ever worked for – years of effort to save, invest, and grow your nest egg – in jeopardy.
Implementing any of these steps – or, better yet, all of them – will leave your family in a far better situation.
1. Get organized: Don’t leave your family scrambling. And don’t assume that they will figure it out. Make sure your loved ones know exactly where this information is and how to access it. Write out any additional advice on how to access these accounts and investments. Keep your personal information, tax identifiers, accounts, investments, and passwords in a secure location that you have shared with your spouse.
2. See an estate-planning attorney. At a minimum, have current and complete Health Care and Financial Powers of Attorney prepared. A good estate plan will help you navigate or completely avoid probate. In the event of your incapacity, it can include instructions and preferences for your loved ones and help you organize your affairs so that your loved ones can find, access, and manage your accounts when necessary.
Estate plans can be useful for keeping your assets safe and can provide an additional layer of protection for you and your loved ones. Plus, it allows you to empower people familiar with YOU, your situation and ready to help. Be ready to review and update this plan every three years – or earlier, if your life or financial situation changes.
3. If you’re an investor and your spouse isn’t, consider setting up an account with a professional money manager you trust. You need to trust this professional with the location of all your financial assets. Having one person who can see all the moving parts lets them give you much better advice. Then, you can rest easy knowing that your family’s financial wellbeing is in good shape for years to come.
Having an organized estate plan is the greatest gift you can give your loved ones. Don’t assume they know what you know. No one looks forward to facing death or illness. But doing nothing makes hard situations close to unbearable. When you’re ready to start a conversation, call 920-743-9117 or e-mail [email protected].