When a spouse dies, many of us comfort and assist the survivor through grief and pain, spending time and ensuring the survivor knows they are loved. We may overlook the financial impact of the death, simply assuming the surviving spouse will boldly continue on and maintain the standard of living that the couple has always enjoyed. Often this is not the reality for a surviving spouse. Under normal circumstances finances are a stress and without proper planning, this stress can be needlessly heightened. Recently I received a painful reminder of how difficult this transition can be:
Got a question if you can help. One of my agents passed away in October. I just spoke to his wife and unfortunately, he had nothing set up to let her know what assets he had and where they were located. I am wondering if you know how does a spouse start to find out where he had money.
She believes he had a small investment account somewhere and he also may have had a small life insurance policy, but we just don't know. She has no clue what, where or anything.
Any ideas? She went to someone for "legal aid" and the price they quoted was much more than she could afford. It's a pretty bad situation...
Thus, the power of proper planning... any ideas would be greatly appreciated. I would like to offer her some help as she is just not versed in these matters.
When a spouse passes away without any planning in place, what do you do? How do you find the lost insurance polices or retirement accounts? Unfortunately in your time of grief you will need to play detective and find the financial institutions where your spouse may have placed money. Here are a few tips:
- Contact any family members or friends the spouse may have confided in and ask if he/she mentioned any financial institutions
- Contact your attorney, banker, accountant and financial planner
- Contact your insurance agent - often life insurance is bundled with auto and homeowners policies
- Look at canceled checks and print monthly bank/credit card statements to see if there are automatic withdrawals/deposits to financial institutions
- Watch the mail for paper statements
- Make a list of current and prior employers and contact HR departments to find out about group life insurance and where retirement accounts are held
Financial institutions are not obligated to inform you of accounts or policies, even if you are the spouse. Typically they will not act until someone notifies them of the death and issues a proper claim. It is up to you to track down the companies where your spouse may have had assets. It is a time consuming and difficult process that may take months and even years.
This devastating situation can easily be avoided by simply having proper planning in place. Estate planning is often thought of after the death of BOTH spouses, but a proper plan can help the surviving spouse avoid this messy situation altogether.
What can you do now, to avoid a situation like this in the future?
- TALK TO YOUR SPOUSE There is no better way to avoid this situation than by simply having a conversation. Confide in each other and make sure you are both aware of the accounts and policies you own and where they are located.
- WRITE IT DOWN If talking isn't your thing and even if it is, make a list and keep it in a place where it can be found. Be comprehensive and specific, detailing accounts, policies, financial institutions and representatives.
- UPDATE A list you wrote in 1994 is only as effective as your loyalty. If you change companies, update your list. Rule of thumb, look at the list each year on January 1st, your birthday or anniversary.
- COMPLETE YOUR ESTATE PLAN Easy Legal Planning offers comprehensive estate planning packages for $595.00 that include a trust, pour-over will, financial and medical powers of attorney and medical directives. In addition, we include a comprehensive section for you to list your assets and financial institutions, instructions for those left behind and we remind you to keep it updated on an annual basis. (How's that for service?!)
Losing a loved one is devastating in itself, but compounding that pain by not having a clear financial picture is a needless waste. Take action today to avoid playing detective while trying to manage grief. Have the conversation, write the details down and complete your estate plan. Your loved ones will thank you now and in the future.