Life events sometimes happen when we least expect them: death, disability, divorce, and dementia, to name a few. Divorcees, widows, widowers, and caretakers often find themselves with responsibilities their partners used to handle. This can also occur with aging parents, siblings, and friends in our care, taking the form of physical, mental, or social tasks around the house. For this series, we’ll focus on the financial, legal, and estate responsibilities many face when transitioning through life events.
It’s fairly common across most couples to have one partner who handles the money or at least one spouse who manages money issues and knows where, when, and how to access financial accounts and documents. It’s not so much that the other person doesn’t want to be involved, but life gets busy and in the way. When a transition in life happens, this can leave the partner scrambling to pick up the pieces.
The goal here is to help prepare before the unthinkable or inevitable happens. By proactively getting things in order and updating them regularly, we can avoid much of the stress that comes after these events occur. Let’s start with a few principles that will be key throughout.
Communication
Make sure you and your partner are on the same page. Get together and discuss the finances as often as you would like, but aim for at least once a year. Talk about accounts, contacts, documents, what they are, where to find them, and how to access them. The more you discuss and review these, the less surprising it will be. If you would prefer the other party not to know dollar amounts or private information, you can withhold that. It is half the battle to know where the account or document is and who to contact to access it.
Set up Access
You never know when you may need to access information that the other partner has on their phone or online. Spouses and partners need some way of getting access should they need to in the other’s absence. Make sure the other person is truly trusted. Please set up a way for them to access your phone apps or online documents. The best way is to have securely stored documents that both have access to. Extra credit if you have password management software.
Create a Reference Guide
Creating one large document that contains all the information one would need is the ultimate goal. This guide gives the person you trust all the information they would need should they need to take over. This reference document would cover all major areas of financial planning:
- Advisors, Assets, and Financial Information
- Liabilities
- Insurance and Benefits
- Documents and Other Information
- Family History and Final Thoughts
Over the next several newsletters, we will focus one article on each of these areas and expand on what each entails. Feel free to follow along and create your master document or reference guide. Start now and give yourself and your loved ones the benefit of peace in the face of a transition.
Click here for part 2 and part 3.
Listen to a deep dive into navigating transitions on the Power Up Wealth podcast.
