The death of a souse doesn’t have to mean financial ruin. If you’re married you should get prepared financially for the death of your spouse.
I’m not trying to be morose. I’m trying to get you to be realistic. If you heed this advice, only good can come from it. At least nothing bad can happen. But if you ignore my advice, you might have to go through an unimaginable financial nightmare in addition to the emotional devastation. This is especially true when one spouse has significant debt.
So, how do you prepare financially for the death of a spouse?
You should each be preparing financially for the premature death of each other. Have a plan. Discuss everything from banking to baking. Make sure each of you are committed to helping the other survive. A great tip is to gather up the mail that you usually deal with and make sure your spouse knows how to deal with it. Your husband won’t like this exercise, but it’s good for him.
2. Share records and important passwords.
Do you know how many (widows) don’t have their spouse’s passwords? It’s astounding. If you don’t have the passwords and other log-in information, all the money in the world will do you no good. That’s because you won’t have access to it.
3. Create checklists.
Everything should be reduced to writing. Pretend you’re a pilot and your family is a 747. Right now, you’re cruising at 30,000 feet. You want to make sure you come in for a smooth landing no matter what happens to the captain during the flight. Airlines make sure of this by putting as much of the flight as possible on auto-pilot and having backup systems for everything else. Included in those backup systems are checklists to help the co-pilot take over in case of emergency. Is your co-pilot prepared? Make it easy for him by creating checklists. What should be included in those checklists?
- Who to call in case of emergency
- Phone numbers for insurance agents, financial planners, lawyers, relatives and friends
- Insurance policies, policy numbers, insurance agents’ contact info, copies of the policies, death benefits, etc.
- Investment and savings account statements, account numbers and contact info for the brokerage firms and advisors
- Social Security numbers, account numbers, passwords and login info for all important websites
- How to budget and how to get out of debt if appropriate
- How to generate income during retirement
- What to do with the retirement accounts and who to name as IRA beneficiaries
- Contact information for credit cards and other debts
- Saving money for retirement
- College planning
- How to invest
- How to access your emergency fund
A few other important items include talking about how to get a part-time or second job if necessary and who to talk to in case questions come up. The very worst feeling for survivors is to feel alone. Your spouse is going to be down to one income (at best) and he’s going to have to survive without you. Try to make it as easy as possible.
These are a few of the questions that should be answered. I’m convinced that if you have a frank conversation, your spouse will come up with a host of other questions.
What other information would you want to have in the case of a spouse’s death?