On Valentines Day, Give your Spouse the Gift of Security

| February 1, 2019 | 0 Comments

Valentine’s Day is the third-largest consumer holiday in the U.S., with about 19 billion dollars spent in Cupid’s name each year. It’s big business for florists and chocolatiers, with over four billion dollars spent per year on flowers and candy alone.

Flowers and candy are great, don’t get me wrong, but as a gift for your treasured partner, they’re not the most impactful. They don’t last long and once given they are soon forgotten. This Valentine’s Day, how about giving your spouse a gift that will really last: the gift of knowing how to continue managing the financial tasks one of you has been handling.

Delegating shouldn’t mean uninvolved.
It’s common for married couples to divide up duties and responsibilities. For example, one spouse may do most of the “inside chores” like laundry and vacuuming, while the other spouse may handle a lot of the “outside chores,” like maintaining the landscape. When it comes to managing the finances, couples often divide things up as well. One spouse may pay the bills while the other handles the investments, taxes or insurance.

Divvying up these tasks is smart.
It’s efficient and it allows spouses to delegate things their partner may have more aptitude or interest in doing. The downside is that the delegating spouse often becomes disengaged from that activity. It’s a problem when a spouse becomes so disengaged that he or she doesn’t know what’s going on. When the duty is maintaining the lawn, it’s okay to not know what brand of fertilizer is being used. But when it’s paying the bills or managing the investments, not being involved can be hazardous. Especially if the spouse whose been doing these tasks is suddenly unavailable, as through death, divorce or deployment.

How you can bring your spouse in the loop.
Organize the bill paying. Create a summary of all the bills to be paid over a full year. Indicate how each is paid, and when each is due. For bills paid online, provide the website and password information. For bills paid by check, provide the mailing address or other key info needed for paying the bill. Also, don’t forget the money needed to pay the bills. Make sure you have access to the checking account. For bills paid by check, access to the physical checks and the power to sign checks yourself.

Summarize the investments.
Create a summary of all the investment and retirement accounts, including account numbers, the titling of each account and the login credentials. If you use a financial advisor to manage investments for you, schedule a meeting for both of you to talk about the portfolio and any key considerations for managing the investments, such as required distributions or scheduled distributions from the accounts to your checking account.

Clarify the taxes.
Discuss last year’s tax return, and the quarterly payment coupons for the current year. Explain the tax situation: Was a big payment due last April, or was there a big refund? Are the tax withholdings from paychecks or retirement distributions up to date? Were there any missed deductions or significant changes? Are you both still on the same page for the charities you support?

Inventory the Insurance and estate.
Make sure you both understand the estate plan. What is supposed to happen at the death of one of you? What about if one of you was incapacitated? Make sure your spouse knows where copies of key documents are, such as powers of attorney, health care directives, wills, trust, etc. Creating a list of the contacts for your estate, insurance, and financial advisors is also very helpful.

Why being in the loop means security.
If your spouse knows what’s going on with the bills and finances, even if he or she has no interest in it, there will be less uncertainty and more peace of mind. And this will help maintain the sense of security you’ve worked to develop throughout your relationship. And this familiarity, even if cursory, will be invaluable if something does happen to upset the balance.

This column is prepared by Rick Brooks, CFA®, CFP®. Brooks is director/investment management with Blankinship & Foster, LLC, a wealth advisory firm specializing in financial planning and investment management for people preparing for retirement. Brooks can be reached at (858) 755-5166, or by email at rbrooks@bfadvisors.com. Brooks and his family live in Mission Hills.

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