You handle a large share of paying the bills and managing the bank accounts. Your spouse handles anything insurance or investment related.
It’s a common practice in many married households to split household responsibilities. Usually a partner’s skills or knowledge are better suited to certain areas. And, there may even be accounts or assets titled in only one spouse’s name for which that spouse is responsible, such as a car or credit card.
Benefits from splitting responsibilities are obvious, but there could be a downside. Problems arise when one person doesn’t have a grasp on what the other one knows and what they do. No big deal as long as everyone keeps plugging away in life as usual. However, it’s a big deal if something were to unexpectedly happen to a spouse leaving a noticeable gap in handling the household affairs.
When you’re not involved . . .
If both spouses have had a share in handling some part of the financial and estate planning picture, generally it’s easier for either one to catch up to speed if it’s ever needed.
However, there’s a segment of women who are in marriages where most if not all these responsibilities are handled by their husbands. Because this has always been his area of expertise, these women are essentially disconnected from critical financial knowledge and decision making. They know little to nothing about how to handle financial and estate planning matters.
Unfortunately, what happens to them if something happens to their husband? Most likely, they’ll be completely unprepared to handle basic, let alone complex, household money matters. Compound this with the emotional grief that accompanies these traumatic events and these women could easily plummet into financial difficulties.
Understand the practicals . . .
Whether or not you split household responsibilities, if you don’t have a good handle on any part of your financial picture and estate plan, it’s paramount you begin the discussion with your spouse. If you have parents or close family members where one spouse is primarily responsible for everything, it may be a good idea to also get this conversation started between them.
A helpful way to think about this is to ask yourself, “If my spouse were out of the picture right now, would I be comfortable enough to handle all our financial and estate planning matters?”
For instance, consider the income and expenses of everyday life. Would you be able to access and manage all your accounts? Especially considering many bills are paperless these days and payments are made online. Are there any accounts or assets only listed in one spouse’s name? Make sure you know what these are so you’re prepared to handle them. It may even be prudent to add both names to them.
If your spouse is responsible for paying the bills, know what bills must be paid, when they need to be paid, and what form of payment is used. Log current usernames and passwords and place in them in an accessible location. Have the email address or cell number linked to changing passwords on hand in case it becomes the only option to gain access to the account. Include all pertinent information that might be needed to make it easier.
It’s also important to have available all information related to your insurance, benefit or investment plans such as life insurance, medical insurance, car insurance, 401(k), or pension. Now is also the time to check that all beneficiary designations are correct. You would be surprised how often an ex-spouse or other individual inherited funds other than the current spouse because this task was overlooked.
To help you get started, we provided a comprehensive Estate Planning Organizer here. Take some time to fill this out together and you will already have taken care of much of the discussion.