Why It’s Important to Keep Your Spouse in the Loop
I’ve been married to my wife for almost 7 years, and early on in our marriage she once jokingly said, “don’t learn how to do something you don’t want to do the rest of your life”. Somehow, I ended up being the only one that knows how to use the lawnmower. In practice it actually works quite well with some things – she doesn’t mind doing the dishes and I’m happy to do the laundry, so we each stay in those lanes for the most part.
I’m exaggerating the examples a bit to make a point. If something unexpected occurs to one spouse, it’s important to have both involved in the family’s personal finances. With intentional communication and some planning, you can be prepared if the unexpected occurs.
For the married couples that have figured out the dishes and laundry, but haven’t talked about money, here are a few steps to open the lines of communication.
Build a Family Balance Sheet
Step one is to build a balance sheet that shows where each of the accounts is located. Take the time to list out each of the accounts. Be sure to include the name of the company, account owner and any other important information. Through this process, you may identify savings bonds your grandmother gave you as a birthday present or an old 401(k) from your first job out of college.
Check the Beneficiary Designations
Next, verify the beneficiary designations on certain accounts. For example, all retirement accounts and life insurance policies have a beneficiary designation on file that states who receives that account if the owner dies. Use the family balance sheet as a reference to make sure you check each of the accounts. You may be surprised to find out that a parent is still named as the beneficiary of the life insurance policy you bought right out of college (rather than your spouse). You’ll be thankful that you checked, and make sure to send in a beneficiary change form for accounts that need to be updated.
Finally, it’s important to have the proper legal documents in place if death or disability occurs. Working with an estate planning attorney, a married couple can ensure their affairs are handled properly and, in the manner most appropriate for them. Taking this step while alive and healthy can alleviate an unnecessary burden if the worst happens.
If you’ve taken some of the above steps, then you’ve already made progress in keeping each other in the loop on your financial life. In closing, nothing can replace simply talking about the future. I’m always amazed how often I hear someone who has lost their spouse say, “he would have wanted it this way”. Be intentional to find the time to dream out loud, say how you feel and communicate to your spouse about what’s most important. You will never be able to replace those conversations.
Dave Deschamps is a Wealth Manager and the leader of the Widows Practice Group at BDF. Dave enjoys bringing clarity and understanding to the big picture questions while filtering out a lot of the distractions. Drawing on over a decade of experience as a CERTIFIED FINANCIAL PLANNER professional, he’s able to help clients balance the financial implications along with the emotional considerations when making important decisions. Dave joined BDF in September 2017 after spending the previous 10 years with a financial planning firm in the Chicagoland area. He earned his B.A. in Business Administration from Calvin College in Grand Rapids, MI.