How to avoid the financial stalemate – or worse – after the death of one of the spouses

This preparation requires involving the non-dominant partner as much as possible financially – long before it becomes a necessity. Here are some ways to do it.

Prepare a go-bag

The first step is for the financially clever spouse to prepare a "backpack", as in spy movies, says Christopher Cordaro, chief investment officer of RegentAtlantic Capital LLC, a registered investment advisor in Morristown, New Jersey.

Financial advisers say this should include a complete list of all financial contacts, advisers, lawyers, accountants, insurance professionals, as well as copies of beneficiary designations. The wife with the required financial knowledge must also prepare a written list or spreadsheet of the assets and liabilities of the couple, including the digital assets and passwords of these accounts. The spouse should also note the location of financial documents, including insurance policies, wills and trusts.

It is also essential that each partner has access to checks and cash independently of each other and that the spouses jointly review the beneficiary designations and the method of titling the assets and financial accounts.

It can be particularly important to ensure that both spouses have the right to survive. "This allows the surviving spouse to more easily demonstrate that he is the sole owner of the home and that he has the right to contact the mortgage company," says Sarah Bolling Mancini, a lawyer. at the National Consumer Law Center. "Things get a lot more complicated when a surviving spouse has to apply for probate so that they can look after their home," she says.

Psychologically, it can be difficult for both spouses to go through these exercises, but this may be essential for the financial security of the surviving spouse. "It's the only way to get both partners more involved," says Cordaro.

Keep the end user in mind

Any information that the surviving spouse needs should be documented in a way that is understandable to that spouse. This could mean preparing two different sets of instructions.

"Even if a person is very organized and has a well-developed description of their wealth and estate plan, it may not be easy to use for a loved one whose mind works very differently," says Gerry. Joyce, General and National Director, Trusts and Estates at Fiduciary Trust Company International. "This is especially true if the couple has delayed an in-depth discussion about their business and planning and the non-financial spouse is now digesting it for the first time."

To try

Whenever possible, it is advisable for the least financially involved spouse to meet key advisors and perform certain routine tasks, such as paying bills, reconciling statements, and renewing insurance policies for multiple clients. months, long before either partner experiences cognitive decline. Joan Crain, Senior Director of BNY Mellon Wealth Management in Fort Lauderdale, Florida.

This process works best when the dominant partner helps to train the other spouse for a month, then allows him to take over the direction of operations for two or three months, under supervision. This exercise is important, she says, even though it is expected that a financial advisor will take care of many of these tasks once the advised spouse is no longer able to do it. This gives the other spouse "enough knowledge about what these tasks entail so that he can properly supervise a rented hand," she says.

Pay attention to income and expenses

In addition, each spouse must also be sure to understand how the death of one spouse could affect household income. For example, if one spouse receives a pension without a survivor benefit and the survivor is the first to die, the surviving spouse may need to replace this income from another region, says Michelle Brownstein , Vice President of Private Client Services at Personal Capital Advisors Corp. in San Francisco.

Spouses should also determine how expenses might change if one of the spouses dies. Brownstein gives the example of a spouse who drives while the other does not drive. The death of the driving spouse could mean that there would be more car payments, auto insurance or gasoline, but an increase in public transportation costs. Another example is housing. If one of the spouses is dependent on the other and the child's caregiver is the first to die, the couple must determine the expenses that would be engaged to replace efforts to look after her children, she said.

Artisan policies on donations

Stacy Allred, Executive Director of the Merrill Center for Family Wealth Dynamics, is another milestone. They should create a written roadmap of the process of reviewing loans or gifts after the death of one of them. This could include places they had given in the past, a mandatory waiting period of 24 to 48 hours for each request received, consultation with the couple's financial advisor to share ideas and even a brief speech to deny requests.

Do not make sudden movements

Couples should also discuss the importance of not making major financial moves in the first year or so of the spouse's death. Often, the surviving spouse is not emotional enough to make big decisions and this is a time when predators have the potential to do the most harm possible.

Predatory lending, pyramid schemes and the sale of inappropriate investment or insurance products are some of the common forms of financial exploitation of the elderly, according to the National Adult Protective Services Association.

Dishonest debt collectors can also try to convince the surviving spouse of his or her responsibility for the deceased's debts. As a general rule, no one else is forced to pay the debt of a deceased person, although there are exceptions such as co-signed loans and credit card accounts held jointly, according to the Consumer Financial Protection Bureau.

Widows or widowers – especially those who have not been so heavily involved in finances – should be wary of the investment arguments or advice of anyone, including financial advisors, who require significant expenses. It's a good idea to get a second opinion from another financial advisor or trusted attorney. "Any advantageous transaction can wait until you get a second opinion," says Bolling Mancini, a lawyer with the National Consumer Law Center.

She warns people to be particularly cautious about high-pressure tactics and to rely on common sense when in doubt. "Anything that looks too good to be true is probably too good to be true," she says.

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