So when he died, she lost more than her happy memories of a lifetime together. She lost the person who knew how everything worked. Her kids live out-of-town, and after talking it over with their mom, they got together and called us in to help Joanne put her life back together.
When we first met her, Joanne had no idea what her income was. She didn’t know what it took to keep the household running each month. She wasn’t sure what assets she had, the size of the car payment, or who she was supposed to pay for her medical insurance.
She couldn’t log on to any online accounts, find the prior years tax returns, or reconcile her checking account. As if her situation wasn’t tough enough, her bank suddenly cancelled her credit card once they learned of her husband’s death, and she almost lost her long-term care coverage when the bill fell through the cracks.
Is Joanne’s situation unusual? Not really. While it is more common for men to handle the finances (and women to take a less active role) in Joanne’s age group, the same pattern can turn up in younger generations as well. In some families, women are now the primary financial decision-makers, while in others it’s still the man who pays the bills and manages the finances, and in yet other households, there’s more of an equal financial partnership.
“Only 43% of husbands are confident their wives can manage the family finances,” writes Cybele Weisser in Money magazine. “Women share this lack of confidence, according to a 2013 Fidelity survey — a big problem, since they will likely outlive their husbands.”
Men have often tried to shelter women from those details. But that ends up doing them a huge disservice. The best way to show your loved ones how much you care is to prepare them for the unexpected.
“In the aftermath of losing your spouse, the last thing you may wish to think about is money,” recognizes Calvert Investments, in a guide put together to help women cope with widowhood.
To ease the transition, here’s what every woman, or man, should have ready to prepare for the unexpected:
- A list of assets, accounts and account numbers. Be able to locate past statements. Discuss how the accounts are titled. Having the statement won’t do you a lot of good if you’re not on the title, and it can take weeks to access funds passing through probate.
- Don’t forget to include information on benefits like pensions, insurance and annuities, and what’s owed on mortgages, credit cards and car loans.
- Make sure each person has a realistic understanding of the couple’s net worth and retirement income. For example, the worksheets we prepare for clients show how much they can expect to spend each year without depleting assets. More than once, we’ve seen cases where the husband secretly spent down assets in an attempt to preserve the “lifestyle,” leaving the unsuspecting widow in perilous financial shape.
- A list of monthly income and expenses, identifying who gets paid and when.
- If you haven’t already consolidated assets, now is the time to do so. Don’t burden your spouse with the task of tracking down assets with twenty different banks and brokers.
- The last three years of tax returns.
- Passwords to access accounts online.
- Know where to find copies of legal documents like deeds, wills, trusts, durable powers of attorney, and medical directives. Better yet, discuss in advance what they mean and how things should work. We’ve seen some great legal documents that don’t work once the dollars-and-cents are factored in. Typical problem areas? IRA and other beneficiary designations, and provisions for the family home, especially in second marriages.
- And don’t forget to schedule a family financial board meeting, at least once a year, to make sure everyone is up-to-date and on the same page.