My wife, Kathryn, and I were driving back from a weekend in the mountains, and, somehow, we got into the conversation about what we would do if one of us died prematurely. Being married to a financial advisor doesn’t mean that she likes to talk about finances or the “what-ifs?” around dying. For me, it is part of many of my professional conversations.
Here is what I told her to do:⇒ Contact our estate attorney before you notify any financial institution of my death or move any money around.
- This is important. If you notify any financial institutions of a death, they must freeze the assets until they have a death certificate and other documentation to release the assets. This could take weeks. Our primary bank account is a joint account. You have Power of Attorney for me, but a POA is void at death. Therefore, you may not have access to certain funds.
- Also, you should not start moving money around. There may be better, more tax-advantageous strategies that should be implemented. Once you start moving assets out of the decedent’s name, you can’t move them back.
- There are procedures that must be followed by probate and other governing laws.
- Do not change advisors hastily because of persuasion by a friend or others. Of course, I recommend Erin Milner or any member of the Global View team. I trust them emphatically to guide you through the transition process immediately after my death for ongoing investment management and financial guidance. They will take care of you.
- I know you don’t like talking about investments but at least try to understand the overall strategy.
- Ask questions. If the advisor recommends drastic changes, it is ok to ask a trusted friend or trusted advisor, such as a CPA, for their perspective.
- Do not get into the weeds of portfolio management. Don’t overanalyze each individual investment.
- Once the strategy is implemented, let it work. Give it time, three to five years, at least.
- It may serve best to only review it quarterly. Too often, reviewing an account can lead to unnecessary anxiety and possibly force the advisor’s hand to change the strategy, hindering reaching your overall, long-term goals.
- Your goals are long-term; therefore, don’t let short-term volatility drive your investment decisions.
- Do not borrow money for personal reasons, even for a car or house.
- This can be controversial for some. But as we get older, we will have more assets, and I want to make sure you are protected from someone taking advantage of you or leaving you in a bad financial situation.
It is common in marriages that one spouse handles more of the finances than the other. However, I recommend that couples talk about finances regularly so that they are on the same page. Also, have a more formal sit-down meeting at least once a year. Have some tough open-ended questions for the conversation. It may feel weird, but it will greatly benefit the surviving spouse at the first spouse’s death.
Taxes are easier to talk about than death. But both are guaranteed parts of our lives. Make it easier for your spouse when the time comes.