I cannot over-emphasize the importance of both spouses knowing their financial affairs inside and out. All too often, one spouse handles paying the bills, overseeing large assets, and making critical financial decisions. This is perfectly normal, and both spouses are completely OK with it when everything is working as it should. Sure, the spouse in control is more than happy to share this information with the other spouse, but that person is typically left to be an observer with very little understanding of every nook and cranny of their financial situation.
Handle the finances together. Make sure you are both on the same page; that you each know the desired method and routine so that everything is familiar.
Here are a few things to look at and have a plan for in the event of a death. Options could include refinancing, selling assets, downsizing, etc..
- Typical monthly expenses
- Mortgage payments
- Private school expenses
- College tuition
- Business expenses
Company vendor accounts — Create a detailed list of how everything is paid (check, online, in-person, autopay, credit card, etc.), necessary passwords, and pin numbers. Make sure all of these accounts are in both of your names. If they are not, make sure that changes.
Banks, credit unions, investment accounts — Also make a list of all banks, credit unions, financial services companies, and credit cards, including contact information, types of accounts, routing numbers, account numbers, card numbers, etc. If you have a trust, make sure the accounts are titled in the name of the trust. If you don’t have a trust, look into who is listed as beneficiaries and update as needed. Use a payable-on-death or transfer-on-death account set up to ensure assets stay out of probate. Make sure the spouse is listed as the designated IRA beneficiary.
What is a payable-on-death account? It means setting up your bank accounts so that the assets in those accounts automatically pass directly to your named beneficiary without complications. With these accounts, you can name a new beneficiary at any time, and your beneficiary’s creditors cannot grab the assets in your account while you are alive.
Credit reports — Understanding your credit reports helps immensely with making you aware of what exists in your name only, your spouse’s name, and both of your names. There are three major credit bureaus (Experian, Equifax, and TransUnion). Get all three and compare. Resolve any disputes directly with the credit reporting agencies.
Flexible spending accounts — FSAs allow employees to set aside tax-deferred money for health expenses. Some may even allow beneficiaries or the estate representative to submit claims for expenses. Ensure you know your FSA account stipulations and how to navigate them when your spouse is deceased.
Digital assets — These days, much of our key financial and estate information is in digital format. This can also include emails, social media accounts, business websites, photos, audio files, videos, graphics, documents, Apple IDs, Google passwords, etc. Keep track of passwords to electronic records and any devices they are on. Many couples use digital password managers as well as a written record so that everything is easily accessible and protected from online thievery. Meeting with an estate planning attorney to get all of this information into your final documents ensures your chosen heirs retain and have access rights to your digital assets upon your death.
Make a list of automatically paid accounts:
Digital cloud storage
Digital newspapers and magazines
Fitness club memberships
Personal products and auto-shipped items
Call Leigh Hilton PLLC today!!
No one wants to think about dying. They certainly do not want to think about their spouse passing away. But it is better to discuss these things together ahead of time and be prepared for when that day comes. Dealing with uncertainty is the last thing you want to worry about when trying to live regular lives without your spouse.
Having a competent estate planner in your corner will help you and your family navigate these often overwhelming waters. That is our job, and we like to think we do it better than anyone else. Please call Leigh Hilton PLLC so that we can help ensure you and your family are taken care of in the best way possible.
Leigh Hilton PLLC wants to be your first call every time for any estate planning need. We look forward to serving you.