There can be a high cost to the surviving member of a couple if the member who passed away was the person who handled all of the household finances, according to The Wall Street Journal in “When One Spouses Handles Finances.”
The cost of not knowing where the money is, how investments are structured, the state of your retirement savings, or the daily details of how bills get paid can be quite high when one spouse is unexpectedly put in charge.
Spouses are both urged to take active roles in the family’s investments and to be certain they are comfortable with the family’s advisors. If they both are not comfortable with the professionals handling their money and legal matters, it may be time for a change. If the change is made after a spouse dies, it should be seen as a move towards independence, and not a betrayal of the spouse’s legacy.
Studies conducted by financial service companies have found that despite gains in education and, to some extent, compensation, women still let their spouses handle financial decisions. Even millennial women, those born between 1980-1996 (roughly sixty percent) leave those investment decisions to their husbands. However, women are controlling more wealth and are more likely to divorce or outlive their husbands than at any other time in history, so taking the financial reins is very important.
Financial advisors are trying to bridge the gender gap. Some encourage spouses to create lesson plans, exploring one topic per session and then go to dinner afterwards (without the kids) to discuss Wills, insurance and investment basics, or whatever the topic of the week was. Others hold quarterly meetings.
It can be frustrating for one spouse to deal with a non-involved spouse who either does not want to learn or has trouble grasping some of the concepts. In that case, getting a non-related person involved might be a good tactic. Set up meetings with your Estate Planning attorney, financial advisor, and CPA that are geared to reviewing your family’s assets and Estate Plan with the focus on bringing the non-involved spouse up to speed.
Reference: The Wall Street Journal (Oct. 22, 2018) “When One Spouses Handles Finances”