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Create A Financial Roadmap Before Your Spouse Dies

By Bart Astor

I don't even know where to begin," Sindy Steinberg told me after her husband died. "I'm just trying to stay on top of the bills. I don't even know all the passwords for the bank accounts and investments."

I heard this repeated from all the recent widows — and widowers — I've spoken to. While the family is deeply into grief and mourning, life around them continues on. And keeping up with it all can be overwhelming.

Steinberg's husband, Steve, died at 62 after a short illness, leaving her to not only deal with crushing grief, but confused and confounded by the intricacies of how their finances were handled.

"Steve was meticulous about how he organized everything," Sindy said. "He had set up everything and managed the day-to-day business of our lives and also the strategy for our future."

Like most families, the Steinbergs, of Connecticut, had settled into separate roles, with Steve responsible for all the family finances.

Picking Up the Financial Pieces of a Family

Running a family is much like running a business. There is income and there are expenses. There are investments and accounts to keep track of and bills to be paid. Although sometimes the tasks of running the household are shared, often there is one Chief Operating Officer, or COO, who keeps it all humming smoothly.

"I'm just trying to stay on top of the bills. I don't even know all the passwords for the bank accounts and investments."

Unfortunately, and too often, when a spouse dies prematurely, the surviving spouse is put in the unenviable position of picking up the pieces without knowing much about the family's finances — not even basic tasks like how their bills are paid.

I am personally well aware of the fragility of life, having seen friends leave us through illness or accident. So I am embarrassed to admit that this shoemaker's children do not have shoes: I have been in charge of the administrative and business life of my family, but have not fully shared enough with my wife or heirs to ensure a smooth transition to the new COO if the proverbial bus hits me.

Gabe Caponetto, a certified financial planner with the Alpha Legacy Wealth Management group of UBS in Red Bank, N.J., emphasizes the importance of creating a roadmap that "connects all aspects of your financial life."

A Plan Provides Security

He also points out that "Having a plan in place will provide both individuals a sense of security that their financial lives are in order." Caponetto thinks of that aspect as key to reducing the anxiety when a partner dies.

Sindy Steinberg, now 64, knew she would ultimately be fine financially, but not knowing the day-to-day tasks she had to take on led to her receiving late payment notices and administrative roadblocks that added to the stress she was already feeling.

Caponetto likes to think of his role as the quarterback, guiding the game for families.

"By knowing who all the advisors are in a client's life — who I refer to as the 'Centers of Influence' that includes financial advisors, CPAs, tax preparers, and attorneys — my client can make one phone call and have the quarterback take over," he said.

The plan he advises clients to create will keep track of assets and liabilities, sources of income, expenses, estate plans, and how accounts and assets are titled. "And," he adds, "the great thing about the plan is that once you start it, you're able to continuously update it as your life changes."

8 Tips For Transitioning to a New COO

1. Access. Make certain all user IDs and passwords are accessible. Keep an up-to-date list on your password-protected phone or computer, or on a piece of paper in a locked safe. Those are easy and secure ways as long as the new COO knows the password to the phone and the combination to the safe. Be sure to also keep the partner's email account active so notifications can still be received.

For some assets that are valuable but may not have a monetary value, such as frequent flyer miles and points, the survivor can continue to utilize them by accessing the account online.

Make certain all user IDs and passwords are accessible. Keep an up-to-date list on your password-protected phone or computer, or on a piece of paper in a locked safe.

2. Sharing Accounts. Make sure both parties have legal access to accounts or safe deposit boxes if one person dies. This may require changing the ownership of some. For accounts with significant assets, consult an attorney to be sure ownership is set up the best way.

3. Automation. Arrange to have repeating bills such as mortgage/rent and loans, credit cards, and utility bills made automatically every month directly from your bank account. And be sure that both party's names are on the account. Make a list of all the recurring bills you have and how they are paid, that is, through a manual process or an automatic withdrawal or credit card payment.

4. Experience. Sit down with your partner and together pay the bills for a month or two. This will be an invaluable exercise and will help not only with the transition later on but could possibly streamline the current process since often we do what we've always done, even if there are better ways.

5. Prearrangements. In the midst of grief, the last thing mourners want to deal with is making decisions about what to do with the body or what kind of service or memorial the decedent wanted. As COO of your family, make sure the incoming COO knows exactly what you want done after you die and whether there are arrangements already made.

6. Short-term planning. Prepare a simple, estimated budget for the next two or three months and share that with your partner. Often the clearest way is to divide the expenses into discretionary vs. non-discretionary so if the incoming COO sees a shortfall, he or she can easily determine where cuts can be made.

7. Longer-term planning for the year. If there are large expenses that will happen later in the year, like taxes or insurance, or expected income such as a bonus, make sure the budget notes that. If possible and practical, the current COO can set aside or notate where the funds will come from to pay the upcoming large expense.

8. Long-term planning. If you have a financial advisor, broker, attorney, or tax advisor, each should have contact information for the others. It is essential that everything is set up for an easy and legal transition of assets when one partner dies.

Goals and plans will likely change later but knowing the original plan and the advisors will make the transition smoother. Once the dust has settled, the new COO can meet with the advisors to review the goals and plans to make sure they reflect the current needs.

Bart Astor, an expert in life transitions and elder care, is the author of the book AARP Roadmap for the Rest of Your Life: Smart Choices About Money, Health, Work, Lifestyle and Pursuing Your Dreams and Baby Boomer’s Guide to Caring for Aging Parents. His website is BartAstor.com and he can be reached at Bart@BartAstor.com.

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