The last thing anyone wants to hear at dinner is, “So, let’s talk about all of our finances and assets and what will happen in the event one of us dies.”
It’s really not a hot date night topic, but it needs to be.
According to David Jackson with Southern Springs Capital Group, an alarming percentage of wives who survive their husbands do not have sufficient information about the family investments, assets, pensions or even bank accounts, and they are therefore left without a clue after the death of their spouse.
“We see men in this situation some, but more often it’s the women who are widowed and do not have a good handle on their finances,” David shares, of the unexpected, unplanned passing of a spouse or partner.
David and his business partner Martin Spears feel confident advising couples on how to be prepared in the event of an untimely death because they have both personally experienced it. David lost his wife to breast cancer at age 41 (he has since remarried), and Martin’s father was only 48 when he passed away, so Martin has gone through the process with his mother.
“Fortunately for me, being a financial planner, our affairs were more in order than most,” David explains.
Martin add that his family recently went to Disney for six days, but his family planned it for three months. “Too many people spend about 30 minutes planning for retirement, which can be a 30-year journey,” he says, using the Disney planning example to show the disparity of importance placed on something as crucial as planning for your future versus a vacation.
David and Martin agree that the crux of getting financial affairs in order between spouses hinges on one simple thing: a conversation.
“We always stress to our clients that they need to ask their spouse, ‘If anything were to happen to you, who do I call? Who do I go to?’ If the spouse doesn’t have an answer, you need to say that you’d like to have an answer to that question. It’s not about a lack of trust. It’s about asking if your spouse weren’t around anymore, who should you trust?” David advises.
They agree that in too many cases, both spouses are not equally vested in their finances. Their solution is that even if one spouse isn’t as well-versed, at least once a year the two need to talk about it. David says the big things that need to be known by both spouses are titling of assets, life insurance policies, beneficiaries on IRAs or 401k plans, and real estate assets.
“We also talk to our clients a lot about account consolidation,” Martin adds. “We will see clients with accounts at six or seven institutions. It’s easier to go to one place. You can still have diversification of stocks, bonds and cash, but it’s not best to do that across multiple institutions. It’s just not necessary anymore.”
David says it was painful to have to present his wife’s death certificate to take her off of accounts after her death and that nobody wants to have to do that six or seven times. “The more it’s consolidated with one institution ahead of time, the less traumatic it is to make changes after your loved one has passed away,” he says.
In addition to consolidation, David and Martin encourage clients to ensure accounts are titled correctly so that things pass along according to your wishes. “We make sure people get their wills and power of attorney set up,” Martin says. “We make sure those things are getting done ahead of time. We ensure that beneficiary documents are done correctly.”
But in addition to some important conversations and planning ahead of time, David and Martin also advise clients on what to do immediately after the loss of a spouse. Their No. 1 piece of advice after losing a spouse? Do nothing.
“My No. 1 counsel to people is to not be in a hurry,” David says. “Don’t be in a big rush to sell the house. Maybe selling at that moment isn’t the best financial thing to do. Maybe you will regret that decision later on. We see people give away all their stuff too quick. Sometimes people do that hastily.”
Martin adds that there will always be a laundry list of financial things that will need to be taken care of after the loss of a spouse. “But we can help by saying, ‘Here’s what you need to do in the next couple of months, and then let’s meet again to talk about what’s next,’” he says. “It can take up to two years for you to learn your new financial norm. We see mistakes get made when people make decisions while they are still grieving.”
This is where a financial advisor can be a valuable asset in a couple’s portfolio.
“We are in the advisory role,” Martin says. “We aren’t salespeople of financial products. We look at your lifestyle and your needs and truly advise you. We look at the big picture and prescribe accordingly.”
This article is sponsored by Southern Springs Capital Group.