It is common in a marriage or a serious relationship between two people that one of them handles all, or certainly a significant part of the financial side of things. Bill paying, taking care of tax returns, handling interactions with investment people, and managing bank accounts are the primary responsibility of one partner. Usually, there is agreement that one person is better suited to handle those duties. He or she probably enjoys it and has developed a system to ensure that what needs to be done is taken care of.
That is fine until a health problem or an untimely death leaves the survivor suddenly facing a desperate form of on-the-job-training with the potential of a financial crisis. Of course, another option is to find a relative or outside person or business to take over this role. This can be quite expensive. Even worse, the person overseeing the matter may be untrained or even unscrupulous. Very quickly a lifetime of careful planning and investments can disappear.
It is much better for the "financial person" in the relationship to teach the "non-financial person" what must be done before disaster strikes. Taking the time to prepare another is an act of love. Frankly, I believe it is also an obligation, a part of what must be done in a committed relationship.
What are the basics that both partners must know? Here is a list from my own experience. As the financial person in our marriage I am committed to be sure Betty knows enough to avoid any financial pitfalls while she is looking at all her options if I am unable to be there.
|Not us !|
- Where do we have accounts?
- How does she get up-to-date statements?
- Where is the safety deposit box key?
- What are the PIN codes for the various ATM cards?
- Are there minimum deposit levels to maintain to avoid fees?
- What cards to we have?
- What are their limits and when are payments due?
- Where does she go on-line to check charges?
- What should she do if she sees a fraudulent charge?
- Where are card numbers stored in case a card is lost or stolen?
- She must know which bank accounts are used to pay which bills,
- What to do when receiving an e-bills
- How to set up automatic bill pay
- How to change payment dates and amounts when needed.
- Where on-line passwords are stored and how to change them occasionally.
- Where extra checks are stored
- How to see which checks and payments have cleared.
- Life insurance is held by whom? How much?
- Car and home owners policies? Who is the agent?
- Health Insurance information and policies, customer service numbers, limitations or restrictions, keeping premiums current?
- Name, address, and phone number of adviser.
- How to look at statements on-line for investments and IRA accounts.
- How to get cash from investments transfered to other accounts to pay bills and provide living expenses.
Taxes: (Welcome to the Jungle!)
This is an area where I do advise her to have a professional handle the state and federal returns. I enjoy doing them (odd, I know) and can make Turbo Tax do what I want. But, there is no reason she needs to be able to take over this area. However, there are things that should be understood: a basic handle on what expenses are deductible, what paperwork to maintain for the tax preparer, and the deadlines for things like quarterly taxes and returns.
This is our list of things we both feel each of us should understand if the need arises. I'd be interested in two things: have you done something like this for your spouse or the person who may have to take over? And, what have I overlooked? Since I still have most of my faculties there is time for me to take care of anything I may have missed.