March 9, 2012 by Carin
Yesterday I shared with you a story about a moment I shared with my dad before he passed away at a fairly young age of colon cancer. My mom was left to raise three girls who were in elementary and high school. My parents were prepared to some extent for my dads passing. They had a will and life insurance in place, but it would best to describe the amount of life insurance in place as not adequate. We didn’t want for anything, but we definitely experienced some lean times and weeks when my mom’s paycheck was needed to buy groceries. But like I said, we didn’t want for anything. What did work in my moms favor was it was the eighties and my parents purchased their house in the sixties, suffice to say things were a lot less expensive then they are now.
Because most people don’t want to think about the “what if I lost my spouse” scenario, you might be leaving your family unprotected. I want to remind you what you should have in place to make sure your family would be in the best possible situation if the “what if” were to happen.
- Will/Estate Plan/Trust – make sure you and your spouse have a will in place outlining who should have custody of your children if both parents should pass away. The last thing you want is for the court system deciding who gets custody of your children regardless of your wishes. Protect your children and make sure they would be placed with the people you think are the best representation of your values. Another thing to think about is setting up a trust for the money your children are set to inherit to control who governs the money, how it is used and when the children will have access to it.
- Life Insurance – Don’t rely on the life insurance you and your spouse receive through a work plan. There is a good chance that the amount offered is not adequate to sustain the lifestyle your family is accustomed to. The last thing you want is for your family to have to sell your home, cars, and possessions to pay off debts or just to pay the bills. Also, don’t think that if something happens, extended family will make up the difference no matter how much money they have. You want to leave you family in the best possible financial situation without having them have to beg, steal and borrow due to lack of planning.
- List of Accounts and Joint Ownership – Make a list of all your accounts and passwords if applicable so that each spouse or trustee has access to them. You don’t want bills overlooked or accounts neglected because someone is out of the loop. Even if one spouse is the family money watcher, make sure the other has some idea what is going on with your finances and accounts. A surprise is not what you want your spouse to have to deal with because they were kept out of the loop. Also, make sure you both have joint ownership of all accounts to avoid having to jump through hoops to gain access.
- Advisors/CPA/Accountant – Have a list of all your family’s advisors, CPA, accountants and any other relevant people who can help sort out any financial issues you might encounter after a spouse dies.
So this weekend sit down with your spouse and talk about these things. Friends are great resources for financial advisors, attorneys, accountants and CPAs. Please make sure your family is set up for the worst possible scenario because the “what if” could strike at any time, we don’t want to think about it, but it can, so be as prepared as possible.
Have a great weekend and we will catch you back here on Monday.