In an interview on MsMoney.com, Kerry Hannon, author of Suddenly Single: Money Skills for Divorcees and Widows, said she wrote her latest book after seeing loved ones face financial difficulties after becoming widowed or divorced.
“Some didn’t even know where their investments, insurance policies and the like were, or have a grip on their cost of living,” Hannon told MsMoney.com.
Being clueless about the family finances isn’t a gender issue. Plenty of men rely on their wives to pay bills, put money aside for savings and retirement, and keep important documents safely stored.
If you’re the one responsible for the household investing and finances, you need to make sure you are keeping your spouse in the loop. That includes:
- Knowing the names, firms and phone numbers for key advisors including your investment manager, accountant and estate attorney.
- Knowing where key documents, such as insurance policies, copies of your wills and investment account statements, are stored.
- Having an overall idea of your financial situation.
- Knowing where all banking and investment accountants are held.
Even a non-working spouse should have an estate plan that includes cash and investments, real estate and insurance proceeds. If one spouse does not work, the working spouse should have not only life insurance but disability insurance. Life insurance on the non-working spouse can also help offset costs such as childcare that may be needed after her death.
If you have an elderly parent who is widowed or divorced, you may want to have the same discussion (although it may be more difficult than with a spouse.) If a parent plans to leave a sizable estate to a child, it’s important that the heir know where documents have been kept and which key advisors to contact.
If you have trouble figuring out what your spouse does and does not need to know, ask yourself this question: If tomorrow I were killed in an accident, what would my spouse need to know to ensure the family could survive financially?