retirement

When You Lose a Loved One Who Handles All the Money

It's not uncommon for one person in a couple to take the lead in finances, but that can cause big problems later on.

Robert and Shirley were a typical retired suburban couple. Robert was a former engineer for a water-treatment plant and Shirley was a retired schoolteacher. Their days were filled with farmers markets, gardening and other odds and ends. Life was serene. Retirement together seemed an endless bliss.

That changed suddenly when Shirley got the call. Her husband suffered a massive heart attack, and he would not make it. Shirley was 73 when Robert, her husband of 35 years, passed away suddenly and unexpectedly. Life would be different for her — in many ways.

Shirley and Robert divvied up the family chores. Robert handled all the “financial stuff” as she referred to it — from saving and investing to ordering checks. Shirley coordinated the household affairs — calling the landscaper, arranging doctor appointments. It worked.

But now alone and with two kids on a different coast, Shirley was overwhelmed with the questions: Where was the money? Would she have enough to live on? What is a stock certificate? How to take Robert’s IRA?

Robert, ever the meticulous engineer, left notepads of every contribution, investment, interest credited and even instructions on where everything was. He also left behind a confusing assortment of investments. He used five different banks, had 35 stocks held directly through stock certificates, two old annuities, an investment property and an old 401(k) still at his previous employer. No wonder Shirley felt overwhelmed.

Shirley’s situation is not uncommon. In my experience, there is usually one spouse who handles the money. Money can be a source of stress for couples to discuss, or one spouse isn’t interested, or simply busy couples divide and conquer. Either way, the surviving spouse is at a huge disadvantage when left out of the day-to-day money management.

For Shirley, she got the help she needed. Her estate attorney referred her to me, I reached out to the accountant, and quickly we got things pulled together. I helped her take inventory of all the assets. I ran projections to show her she had enough money to live on. I encouraged her to consolidate her five banks into one, got the paperwork to transfer the stock certificates into her name, instructed her on how to take Robert’s required minimum distribution from his IRA, moved his old 401(k) into an IRA for her, and encouraged her to sell the investment property. This gave her peace of mind.

All this led me to sit down with my wife and have the talk. It was kind of morbid at first, but it gradually made me feel better knowing my wife wouldn’t be scrambling for answers at a difficult time. I even created a file labeled “If I die” — for lack of a better title, I thought it is self-explanatory — that keeps our wills, life insurance policies, a summary of investment accounts, college accounts and even notes to my kids. Let’s hope we never need it.

About the Author

Michael Aloi, CFP®

CFP®, Summit Financial, LLC

Michael Aloi is a CERTIFIED FINANCIAL PLANNER™ Practitioner and Accredited Wealth Management Advisor℠ with Summit Financial, LLC.  With 21 years of experience, Michael specializes in working with executives, professionals and retirees. Since he joined Summit Financial, LLC, Michael has built a process that emphasizes the integration of various facets of financial planning. Supported by a team of in-house estate and income tax specialists, Michael offers his clients coordinated solutions to scattered problems.

Investment advisory and financial planning services are offered through Summit Financial LLC, an SEC Registered Investment Adviser, 4 Campus Drive, Parsippany, NJ 07054. Tel. 973-285-3600 Fax. 973-285-3666. This material is for your information and guidance and is not intended as legal or tax advice. Clients should make all decisions regarding the tax and legal implications of their investments and plans after consulting with their independent tax or legal advisers. Individual investor portfolios must be constructed based on the individual’s financial resources, investment goals, risk tolerance, investment time horizon, tax situation and other relevant factors. Past performance is not a guarantee of future results. The views and opinions expressed in this article are solely those of the author and should not be attributed to Summit Financial LLC. Links to third-party websites are provided for your convenience and informational purposes only. Summit is not responsible for the information contained on third-party websites. The Summit financial planning design team admitted attorneys and/or CPAs, who act exclusively in a non-representative capacity with respect to Summit’s clients. Neither they nor Summit provide tax or legal advice to clients.  Any tax statements contained herein were not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal, state or local taxes.

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