Are Your Family’s Finances a Team Effort?

Some of the stories from financial planners are heartbreaking.

A man in his late 50’s passed away after a two-year bout with cancer. Even though he was terminal, his wife never made the effort to understand the couple’s finances. Within a year of her husband’s death, she lost the family home and had to move in with her children.

Another man unexpectedly ended up in the hospital in a coma. When his wife called their financial advisor to get access their accounts to pay bills, the advisor told her he couldn’t even discuss the accounts with her. She was on the account as a beneficiary, but not as a joint account holder.

Physical and Financial Tragedies

These are real stories about families in which one spouse handled all the finances, and the other – usually the wife – had no clue what to do after a death or a divorce.

“We know that, on average, women will be left alone, either through widowhood or divorce, for a substantial part of their lives,” says Neale Godfrey, New York Times bestselling author of 29 books, including Get Off Your Assets: A Woman’s Guide to Avoid Getting Screwed in Your Gray Divorce.  “And if they’re not involved, not only are they dealing with the emotional shock of losing a spouse, but also the emotional shock of not being involved in their finances, and it can be overwhelming.”

“Many women lack interest in in in the finance department, leaving it to their spouse to make decisions and, that can run into some serious situations”

“Many women lack interest in in in the finance department, leaving it to their spouse to make decisions and, that can run into some serious situations,” says MaryJane LeCroy, senior wealth advisor at Linscomb Wealth in Atlanta, Georgia. “God forbid, if the husband does pass away at a young age, or very unexpectedly, the wife is left not knowing where to go, who to turn to.”

A family’s finances should be a team effort. If not, the spouse who is not involved with the couple’s finances may find themselves totally in the dark if the other dies becomes incapacitated.

Tips from the Experts

Some sage advice from the experts for married couples:

Both spouses should know the financial team

A couple should meet with their financial advisors together, even if both can’t attend every meeting. “I understand finances aren’t for all women, or men, for that matter, says LeCroy. “But let’s say you meet with your advisor quarterly. Maybe the spouse doesn’t have to come to every meeting but should really be a part of that meeting at least annually or at a minimum, copied on emails of, summaries of discussions that the client has had with the advisor.”

Adds Godfrey: It’s essential that, on a quarterly basis, the husband and wife sit down with those financial people (financial advisors and accountants) to review what the financial circumstances are. It lets you know what money there is, what money there isn’t, where it’s going and what it’s doing, and is it going to be there in the future.”

Write down passwords and share with your spouse

“That is the whole cyber world we are in now,” says LeCroy. People have passwords for banks, brokerages, pensions, Social Security and even to pay bills. “So maybe a password manager for all your user IDs and passwords is something a handy tool for spouses to have and or at least, you know, be aware of where to go get those items.”

Take Turns Paying Bills

“Financial responsibility should be a shared responsibility, meaning, let’s say, with bill paying, one month I pay them, one month you pay them,” says Godfrey. “And the reason is that the process is seamless. If both spouses are involved, it’s very hard to hide bills, to hide a financial situation, to hide a bankruptcy, to hide accounts that may be, you know, in someone else’s name, etc.”

“I had a case with a woman that in the divorce there was a huge tax liability of $400,000 and the IRS went after her,” says Godfrey. “She had no idea, because she wasn’t involved In the finances. You can’t say ignorance is a defense with the IRS. So, they got divorced. He declared bankruptcy. They went after her because she had money, and they took pretty much everything away. That was huge wake up call for not being involved in knowing what was going on.”

Create a “life” file

“Both spouses will know where to turn to if, if one is no longer in the picture,” says LeCroy. “That file would include bank records, passwords, user IDs, life insurance policies, the last will and testament and limited powers of attorney.”

“Let’s say the husband does pass away prematurely, and the wife really has no clue about, where anything is.,” says LeCroy. As soon as a financial institution gets wind of a spouse passing away, unfortunately, many of those accounts are locked and nobody can access them. They’re full on suspended with any activity. “That could be troubling for the surviving spouse, and he or she has no means to get cash and live and pay bills. that does happen all too often.”

“The biggest thing is that assets get frozen, and the surviving spouse has no way to get access to cash that they need just, just to live every day. And, have some food on the table. if you will. It’s a shame, but it happens.”

New to Estate Planning?  Check out Senior Planet’s special webinar on Wills and Estates on April 18! Details are here.

Have Durable Power of Attorneys

“Incapacitation is a real thing, and I do encourage clients to have at least one basic checking and savings account for them to own jointly, whether it be with rights of survivorship or tenants in common,” says LeCroy. “Nobody will give you information unless you have proper legal proof to show that you can act on that individual. Durable Power of Attorneys are going to be the way to go for that, especially a healthcare power of attorney to make healthcare decisions for the spouse that is on life support.”

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Rodney A. Brooks is an award-winning journalist and author. The former Deputy Managing Editor/Money at USA TODAY, his retirement columns appear in U.S. News & World Report and Senior Planet.com. He has also written for National Geographic, The Washington Post and USA TODAY and has testified before the U.S. Senate Special Committee on Aging. His book, “The Rise & Fall of the Freedman’s Bank, And Its Lasting Socio-economic Impact on Black America” was released in 2024. He is also author of the book “Fixing the Racial Wealth Gap.” His website is www.rodneyabrooks.com

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