You and your spouse are healthy. So letting your mate worry about the details of your finances might seem fine. But life is more about changes than constants. And if you’ve never taken the time to truly understand your finances, you’re setting up yourself and your heirs for a potential fall.
The shock of a death or a crippling disability can be debilitating even for people who have their fiscal house in order. Imagine the chaos stemming from trying to suddenly educate yourself about your assets if your spouse became seriously ill or died.
And even if you are able to cobble together an understanding of your portfolio, you may not be able to take action. For example, let’s assume your spouse becomes incapacitated. Without a durable power of attorney in place, you won’t be able to sell, transfer or refinance the real estate you jointly own. Without a durable power of attorney, you cannot request, stop or change distributions from your incapacitated spouse’s IRAs or employee retirement accounts. Instead, you would have to petition a court of law to become your spouse’s guardian to gain the authority to do this. Of all the things a crisis requires of you, petitioning a judge isn’t one you want to add to your list.
We’ve seen situations where a couple has saved money, invested wisely and a crisis strikes. Perhaps, the tragic event is the death of a child. The partner with knowledge of the financial situation shuts down emotionally and can’t bring themselves to make any decisions. We do the best we can to identify goals and focus on the good things that they can do with their money after such an event. But if their spouse isn’t able to step in, at least momentarily, to help sort through next steps with a financial adviser, then the couple’s problems can be compounded.
A good marriage is a partnership. Both halves need to be involved in the status of and strategy for your finances. You may not both be numbers people. But leaving the tracking and investing of your savings entirely to your better half is bad planning, especially if a crisis strikes your lives. And it can cost you your hard-earned savings if you make uninformed financial decisions without a solid understanding of the strategy your assets were built on. Manage your money together, so either one of you can smartly face a crisis.
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