Hi there. My name is Bridget Mackay and this is my video blog. I’m an attorney. I work in the area of estate planning, wills, trust, probates, trust administrations here in Petaluma, California. Today I wanna talk about who is in charge of the finances in your household. It’s not uncommon for couples to kind of divide and conquer in their families and for each of them to take on different jobs. One may be dealing with all the household chores and doing the laundry, mowing the lawn, making and arranging things for the kids, making and arranging repairs for the house and the other spouse may take on all the finances and bill paying and managing all the money for the couple. And dividing up the work in working households in this day and age is the only way we can get it all done.
But it’s important especially with finances that those spouses know and understand each other’s chores and especially that the other spouse understands the chores that the financial spouse is taking care of. I’m gonna give you an example. I had some clients who divided their chores and the wife mostly handled all the bill paying and kept on top of investments and where their money was at, and she knew how much they had, when their bills were due, how much interest they were getting out of their investments and most of the contact with their financial planner. And she did a lot of this work online, both paying bills and receiving them. Well, unfortunately she had a stroke at 52, it rendered her completely incapacitated and recovery for her took many, many months, over two years.
In the meantime, her husband was lost. Bills were getting… Were going past due, threats of repossessing their car came, a foreclosure notice by mail came for their house. A lot of that due to the medical issues that were going on, but also he just had no idea where to find this information and deal with it. And so finally we sat down. His children helped him locate where all the bills were, we had to take the accounts offline and do them by hand because that was not something he was comfortable with and we were locked out of what the bill pay were, so… What the bills were, and it took a long time and it did mess up their credit. It’s important that if you are the financial spouse, the other spouse knows what’s going on. Don’t let it happen to you.
I’m going to give you 10 things you need to know and get in line in order to avoid this situation.
One is, know where your accounts are. Sit down with the spouse who doesn’t handle finances, write out where your checking, your savings, your investments are. Write out the account numbers, what bank they’re with.
Number two, what are the passwords, security questions and usernames for those accounts that are online? So next to all those accounts that you write down, if there are accounts that you deal with online, know what your username is, your password, and oftentimes now you need a security question or security number in addition for that spouse to get into those accounts.
Third, do you have automatic transfers coming out of your online bill pay or deposits? Do you have automatic deposits going in like Social Security? Identify which accounts those bills are coming out of or those deposits are being made into.
Fourth, are there automatic bill pays and paperless bills? So bills that come in that don’t… You don’t get in the mail and then maybe pay online. Identify those. Make a list and include when they’re paid each month.
The fifth, is where are your life insurance policies. Make sure that non-financial spouse knows where all that important paperwork is. Where are your healthcare cards, is the sixth one. Always know where that is because I know in this couple’s situation it took him a while to find the health insurance and the cards to cover the incredible hospitals bills that racked up.
At number seven, have your durable power of attorney for the spouse and know where the copies are. In my example, the husband relied heavily on these to get into the bank accounts, to identify himself with his spouse’s IRA and other important accounts.
Eight, have your healthcare directives done and know where those copies are because those are used a lot as well, given to healthcare professionals or anyone you’re making healthcare decisions for.
The ninth is, make sure you both have wills, preferably trust, depending on the size of your estate and know where the copies of those documents can be found. That was another problem. It’s not only the banking and financial issues but where are all the important papers that we’re gonna need to rely on? Where are the copies of those?
Finally, make a list of all your trusted advisors with their addresses, phone numbers and emails. In this list you want to include your estate planning attorney, your CPA, anybody you have banking relationships with that you know at your particular banks, all of those folks.
Finally, take a day to gather all this info and share it with each other. Sit down, make a list, sit down, share it with each other and know where that list is gonna be kept. This will be your master list and it will have a location and a place where that other spouse can find it.
If you don’t have a trust or a durable power of attorney or a healthcare document, see a reputable estate planning attorney and have them prepared.