Survivorship Planning Checklist

May 28, 2020

In many families, one partner takes a more active role in handling the finances than the other. Often, this division of labor stems from fear, time pressure or lack of interest.

Regardless of the root cause, having one spouse exclusively handling family finances can put the other partner in a difficult position in a time of crisis. What if one person handles all the finances, and he or she passes away?


Sharing Financial Management

A study by The Hartford Insurance Company and the MITAge Lab found that 36 percent of couples interviewed reported that one spouse is the dominant financial manager. According to a recent UBS report, 56 percent of married women leave investment decisions to their husbands. Among millennials, an estimated 61 percent of married women leave financial decisions to their husbands.

Having the investment knowledge and financial information siloed with just one spouse can be especially problematic because wives are more likely to outlive their husbands. The worst-case scenario is a surviving spouse who doesn’t know what assets they have or how to access them. He or she may not understand what’s important and how cash flow is derived. The surviving spouse may not have a relationship with the professional advisory team nor a deep understanding of the family assets, accounts and guiding financial values.

It is never too late to take a more active role in the family’s finances or to guide the other spouse into taking a more active role. Not doing so can lead to challenging times for the surviving partner. These difficulties can compound on each other with lapsed mortgage payments, cancelled credit cards and other unexpected financial changes.


Steps to Take to Mitigate Risk

Fortunately, couples can take concrete steps now to mitigate the risks of this scenario and to ensure continuity if the unfortunate happens. You can reduce the financial and emotional impact by being informed, strategic and prepared.


Here are a few steps to take immediately to help make the road ahead smoother:

    1. Communicate regularly with your spouse or your executor about finances. Communication is extremely important and serves as the foundation for all survivorship planning. At least once a year, couples should have an in-depth conversation about how financial affairs are handled. If you’re single or widowed and have a designated executor or trustee, be sure to communicate this information with that person. This information can also be shared with your children, if you so choose.
    2. Prepare a master list of account data and contact information.Write down account numbers, investment information and online access data for all accounts as well as information about insurance, especially life insurance and long-term care policies. Also include contact info for your investment advisor, accountant, attorney and insurance agents. Be sure to include information about the location of safe deposit boxes as well as keys to safe boxes where you keep important estate planning documents, property deeds, and titles to vehicles. Gather all this important information and store it in a secure place.
    3. Explain your overall financial philosophy. What are your family’s financial priorities? Why are you doing what you’re doing? Surviving spouses can be disconnected from the values and the logic informing financial decisions. Get on the same page regarding values, strategy and priorities and make it clear how these items inform your overall financial plan. Make sure this is coordinated with the information your financial advisors have on hand regarding your investing philosophy.
    4. Create an annual personal balance sheet and cash flow statement. Use convenient software like eMoney or list all assets and liabilities and to create a snapshot of your overall financial situation. This online software can connect to your investment accounts and banking accounts, which allows the data to update in real time, based on account balances. You should also work with your advisor to build these out.
    5. Introduce your spouse to the team of advisors who help guide your financial affairs. This will help make your spouse feel more comfortable reaching out for help when the time comes. These professionals — including attorneys, accountants, financial advisors and insurance agents — can help a surviving spouse navigate financial issues and challenges that he or she may not anticipate in advance.
    6. Write a letter to your spouse or to your executor. Outline your values and provide context for financial decisions you’ve made over the years. You can give a hard copy of the letter to a trusted financial professional to share upon your death or you can add the letter to your online “vault”, if you choose to create a central electronic database of important documents.


Do you need help getting your financial affairs organized or planning for the future? We’re here to help. Please reach out to us to get started.