Elaine was always happy to let her husband, Monty, handle the finances. He was good at it, and Elaine always felt secure that they had a roof over their head and money in the bank.
But when a stroke unexpectedly took Monty's life, Elaine suddenly faced the prospect of paying bills and making decisions about investments she knew nothing about. Paralyzed by grief, Elaine didn't know where to begin. She knew they had money in their checking account, but she had no idea how much she had in investments or even what institutions Monty had opened accounts with. She didn't know when the mortgage was due or how much the monthly payments were.This situation is not uncommon, especially for widows, says Laura Bunn, First Horizon Triangle Market President and Private Client Executive Mid-Atlantic Region.
Some couples, specifically those of a certain age, may feel that husbands should be responsible for financial management. But in reality – as Elaine's experience showed – it's vital for both members of a couple to be involved in money matters.
Fortunately for Elaine, Monty had been working with a team at First Horizon who understood that no one should make long-term financial decisions in the throes of grief.
“We addressed her immediate need by inventorying her current state,” explains Bunn. “We introduced her to other partners to help her identify her full team.”
Only when Elaine was ready did her team begin to work on short-term financial priorities, then eventually long-term objectives, like planning her own legacy.
“As time passed, she adjusted the structure of her estate documents to match her legacy priorities,” says Bunn, adding that Elaine's new financial plan included the opportunity to circle back with the team in times of uncertainty, like career changes, and make adjustments if needed. “The planning process empowers her to make informed decisions and never act out of fear.”Essential Financial Steps for a Smooth Transition
None of us want to imagine that we would suddenly lose a partner, but tragically, it happens every day. It's best to start preparing now.
“Women who do not share financial management with their spouse may find themselves uncertain of important details, including how much money they have, where it is housed, how to access information, who to contact for assistance, or the timing and process of bill payments,” says Bunn.
Elaine's transition to life as a widow could have been smoother if she'd taken these steps to master the financial basics both members of every couple should know:
- Know your team. Most people need a bank relationship manager and a financial advisor, and many also have a trust and estate attorney and certified public accountant. “Maintain contact information for your team so that if needed, you can easily access this information,” Bunn advises. If you don't already have a team like this, assemble one now.
- Know about your cash flow. How much do you have coming in each month, and from what sources? Paychecks, investment proceeds, rents? What are you paying out? Are you spending more than you bring in, the same amount, or do you end each month with a surplus?
- Know where your documents are. You might keep a master folder with a financial plan, if you've made one, wills, powers of attorney, and any other financial planning documents.
- Know what you need to do each month. When is each bill due and where do the funds come from? Do you need to take regular required withdrawals from a retirement account?
Once they have covered these basics, a couple can move on to sharing in-depth financial knowledge:
- Work on a financial plan together. “A financial plan creates clarity and peace of mind,” Bunn says. “It may include major purchase plans, education, retirement, investing, and your legacy.” Meet with your planner together to create a plan or to update an existing plan to include each of your priorities and concerns.
- Learn the details of managing your cash flow. When are your property taxes due? If your water heater breaks, how will you cover that expense? A great way to help a new person learn your inflows and outflows is to set up an automatic bill pay service and an account aggregator that shows all the information on one screen.
- Plan together for the inevitable. What insurance products do you own – life insurance, disability, long-term care? Do you need to change your coverage in any of these areas? When planning your estate together, some documents, such as the will, will be completed individually. If you don't already have advance healthcare directives and durable power of attorney documents written up, work with your team to create them, and make sure you both understand them. Your legacy should honor both of your values and priorities. What will happen to your assets when one or both of you passes? Are there family members whose education you want to support? Charities dear to your heart? Although no one wants to think about the end of life, planning the good you can do with your legacy can be a beautiful conversation for a couple to share.
What If the Worst Happens?
If you suddenly lose a partner without having done these planning steps, a simple to-do list can help you avoid becoming overwhelmed by financial duties on top of your grief:
- Contact any team members you do know, starting with your trust and estate attorney. Next call your bank relationship manager, financial advisor, and your CPA.
- Contact the Social Security Administration.
- Gather all documents you can find at home. “Get organized by familiarizing yourself with bank accounts, wills, and financial planning documents,” Bunn suggests. If your spouse managed finances using a computer, log on and see if you can access bank accounts that way. Check for any digital files and records such as spreadsheets.
Plan together for the inevitable. Losing a spouse changes your whole life, not just your financial life. Whether you are preparing for the future, or suddenly faced with a future that you didn't anticipate, your First Horizon team can help you handle what financial details need sorting now, so you can focus on taking care of yourself and being with your loved ones. When you're ready to plan for the future again, your First Horizon team will be there for you.
