Navigating Financial Planning Together with Your Spouse

Married couples tend to divide up household responsibilities in accordance with their strengths and preferences, but when it comes to financial planning, it’s critical that both spouses be involved, knowledgeable, and informed. Communication is key to ensuring that both spouses are financially savvy and prepared to handle affairs in the event of a major life change. If anything should happen to you, your spouse will need a “road map” to navigate the future confidently and strategically – and vice versa.

According to a recent study by Fidelity, nearly 1 in 4 couples say money is their greatest relationship challenge. Many of the couples in the study shared that they had only one partner take financial lead. Having a couple's financial information siloed with one spouse can be problematic. The worst-case scenario is a surviving spouse who doesn’t know exactly what assets they have or how to access them. The surviving spouse may not have a relationship with the professional advisory team, understand how cash flow is derived, or have an understanding of family assets, accounts, and guiding financial values which can lead to challenging times for the surviving partner, potentially resulting in lapsed payments, overdue credit cards, and other unexpected financial changes. Fortunately, it’s never too late to take a more active role in your family’s finances or to help everyone get on the same page financially.

Starting with a Team Approach

Whether you and your spouse are currently wrestling with financial decisions or haven’t given planning much thought, you can create a more harmonious financial life by taking a team approach as a couple. If you and your partner have different financial roles, planning gives you the opportunity to share your current financial picture and discuss common goals.

As part of this team approach, it’s important to clearly define the roles each spouse will have going forward. Communication is key and serves as the foundation for all survivorship planning. At least once a year, couples should have an in-depth conversation about how their financial affairs are handled. This discussion should include practical information such as a detailed balance sheet (indicating which accounts are held where), cash flow (including income sources and expenses), plans for a spouse becoming incapacitated or passing away and knowledge of your family’s professional advisory team (CPA, attorney, investment advisor, etc.). A financial advisor can coordinate with your broader team of professionals to ensure the smooth transition of responsibilities.

Consider updating your estate planning documents together, discussing important issues with your attorney as well as your advisor. Additionally, it is important to share preferences for funeral arrangements and burial plans so that when the time comes, one spouse is not burdened to make those decisions when dealing with a loss. There should be special consideration given to whom you would like to serve as your executor, power of attorney, and trustee if you create a trust. If you do not have a family member that you can trust to competently serve as a trustee or executor, a professional trustee or executor should be considered. These conversations could lead to meaningful discussions with your spouse about your joint legacy and how you would like to transfer wealth in the future to family members, charitable organizations, and causes that are important to each of you.

Getting Organized

One of the smartest things you can do to prepare for the future loss of a spouse, a terminal diagnosis, or memory issues like dementia and Alzheimer’s disease is to share important information, including tax information, estate documents and account passwords. This is an important strategy to ensure continuity, particularly when one spouse has been primarily responsible for paying bills and handling investments.

The Fiduciary Group’s online portal provides a secure, encrypted “vault” where clients can save important documents and organize their financial affairs in one location. If you have an online login to an account, you can enter the login information on the portal so it receives a feed of your account balances and holdings. The online vault is an ideal place to upload wills, medical directives, powers of attorney, and tax documents as well as private assets, debt, real estate, insurance, long term care policies, and outside investment accounts. Also include contact info for your investment advisor, accountant, attorney, and insurance agents as well as information about the location of safe deposit boxes, keys to safe boxes and it will automatically load your transactions and categorize them to build a budget. Ultimately, a budget could help you and your spouse increase your savings, reduce debt, and modify your spending habits to prepare for retirement.

Lastly, consider whether assets are titled appropriately to align with your financial plan. You may need to make strategic adjustments or to set up a living trust. We suggest scheduling a financial planning session with your advisor, who can help you take inventory and offer a holistic view of your assets, explaining what would happen to your assets in the event of the death of a spouse.

Ask for Help

It can seem overwhelming to go through all your financial and estate planning documentation and it’s not uncommon for couples to procrastinate on these matters. We’re happy to facilitate financial planning and survivorship planning conversations between couples or the whole family, as we’ve seen first-hand the tangible benefits gained by clients who take the time to work through the process together.

Our team at The Fiduciary Group can help you and your family create financial plans, achieve your investment goals, and get on the same financial page. We understand that every client’s situation is unique and are always here to help. Please reach out to us for assistance anytime.