Why and How To Put Your Legal and Financial Affairs on Autopilot

by Michael L. O’Brien
Put Legal and Financial Affairs on Autopilot photo

Will your spouse be OK financially if something happens to you? Take these steps to put your legal and financial affairs on autopilot.

Sharon Waldrop, from Highland, California, has managed her family’s finances for the past 12 years. Her husband has no interest in family finances and bill paying.

“His financial skills are far from superior,” Waldrop says. “I’m good with numbers and I enjoy the challenge. My husband doesn’t even know who we pay our mortgage to each month, or who carries our automobile insurance. He would have to do some investigating to figure this out, and I have all the resources available and easily accessible.”

Don’t leave your spouse in the financial dark

Planning for the incapacitation or untimely death of a spouse means taking steps today to put your legal and financial affairs on autopilot. A surviving spouse shouldn’t be forced to make critical decisions in a time of grief and loss.

“If one spouse handles everything, it leaves the other person completely in the dark concerning what the family has, where everything is located and what advisors to talk to about it all,” says financial planner Joseph Hearn. Hearn and attorney Niel Nielsen, both based in Omaha, Nebraska, are co-authors of If Something Happens to Me. The workbook and document organizer allows couples to arrange financial, legal and insurance information and provides step-by-step guidance on what to do after losing a loved one.

Compartmentalizing of financial tasks puts your spouse and family at risk

In many families, one spouse may handle bill paying, while the other tackles insurance. Compartmentalizing of tasks can put a family at risk. A surviving spouse will inherit responsibility for managing everything, resulting in confusion and added stress. Some spouses will be left in a precarious financial or legal situation.

Key documents are needed during difficult moments. Unfortunately, people don’t focus on organizing them. Some papers may be in their safe deposit box. Others may be scattered about, shoved in a drawer, stored at the office or thrown away.

How do you plan for the unthinkable?

First, meet with advisors and prepare or obtain documents like a will, powers of attorney and life insurance. If you and your spouse were to die simultaneously, for instance, not having your affairs organized could result in confusion over the care of your minor children, or grandchildren if you have custody of them.

If parents die without a will, a court will appoint your child’s guardian, not necessarily in line with your intentions.

Subscribe to After 50 Finances, our weekly newsletter dedicated to helping you plan for a comfortable retirement even if haven't saved enough. Subscribers get The After 50 Finances Pre-Retirement Checklist for FREE!

Your Email:

You deserve a comfortable retirement.

Subscribe to After 50 Finances, our weekly newsletter dedicated to people 50 years and older. Each week we feature financial topics and other issues important to the 50+ crowd that can help you plan for a comfortable retirement even if you haven't saved enough.

Debt ChecklistSubscribers get The After 50 Finances Pre-Retirement Checklist for FREE!

Your Email:

Know where your papers are and their purpose

File essential documents in separate folders. Label each folder and place them in alphabetical order in a file cabinet or storage box.

Locate applicable data, listed below, and insert in separate folders:

  • Identification numbers, including social security, military service, drivers license and health insurance for you and your spouse; your children’s social security (if minors)
  • Tax returns
  • Current will, living will, trusts and amendments, durable powers of attorney for finance and health care
  • Military discharge papers
  • Insurance policies
  • Inventory of home contents
  • Birth certificates and/or related data for family members and dependents
  • Marriage license
  • Current statements from assets and liabilities, including annuity, bank, brokerage, education savings accounts, IRAs, mutual funds, credit cards, loans, mortgages, and stock certificates and savings bonds
  • Pension and retirement plans
  • Other assets, such as vehicles
  • Closing/escrow papers for purchased real estate
  • Documents for ownership of a business
  • Usernames/passwords on accounts and computer files
  • Divorce Judgment or decree from a prior divorce
  • Contact information of current accountant, attorney, financial planner, insurance agent and other advisors
  • Pre-planned funeral arrangements, such as cemetery lots and burial intentions
  • Contact information to inform friends and acquaintances
  • Employer information

Be diligent: Revise an inventory of your assets and liabilities, attach to a trust or will, and update as changes occur. Inform a trusted family member of the location of your safe place, and ensure that a trusted person can access the documents at your disability or death. Otherwise, you’ll force your trustee or representative to determine what your assets are and possibly overlook some.

Store your computer-based records in a safe place, and prepare instructions for your loved ones to access them.

What should you keep in a safe deposit box?

“As a general rule, we tell people not to keep anything in their safe deposit box that they may need in an emergency, such as a power of attorney,” says Nielsen. “The safe deposit box of a deceased person is often sealed at the time of death. Avoid keeping items in your box that heirs or personal representatives may need immediately.”

Here’s a list of items to store in a safe deposit box.

Do:

Don’t:

  • Will or estate plan (Keep a copy here, but make sure to have a copy elsewhere.)
  • Life insurance (Instead, leave a list of your policies.)
  • Medical or financial powers of attorney
  • Burial instructions
  • Cemetery deeds
  • Funeral arrangements
  • Property owned by others

The consequences of not having your affairs in order can be dire

Surviving spouses could be faced with:

  • Not knowing whether or not they have sufficient money to live on. They may live in fear and austerity or, alternatively, overspend in ignorance.
  • Having no idea what assets they have; some may go unclaimed.
  • Vulnerability to unscrupulous financial planners, real estate agents, attorneys, family members or friends.
  • Pressure to make decisions about the deceased spouse’s business sooner than necessary or prudent.
  • Estate taxes that could have been avoided.

“Attorneys, accountants and financial advisors charge thousands of dollars to organize estates,” Hearn says. “Pain, stress, aggravation, family quarrels, lost time and wasted money that result from poor planning and organization can multiply that sorrow. Having your legal and financial affairs organized not only helps others in the event of your death, but it becomes a resource during your life.”

Reviewed April 2021

You deserve a comfortable retirement.

Subscribe to After 50 Finances, our weekly newsletter dedicated to people 50 years and older. Each issue features financial topics and other issues important to the 50+ crowd that can help you plan for a comfortable retirement even if you haven't saved enough.

Debt ChecklistSubscribers get The After 50 Finances Pre-Retirement Checklist for FREE!

Your Email:

You deserve a comfortable retirement.

Subscribe to After 50 Finances, our weekly newsletter dedicated to people 50 years and older. Each issue features financial topics and other issues important to the 50+ crowd that can help you plan for a comfortable retirement even if you haven't saved enough.

Debt ChecklistSubscribers get The After 50 Finances Pre-Retirement Checklist for FREE!

Your Email:

Will You Be Leaving Thousands In Social Security Benefits Unclaimed By Filing at the Wrong Time?

We recommend a tool from Social Security Choices that can help you determine the best time to collect so you can maximize your benefits.

Click here to maximize your Social Security benefits.

Pin It on Pinterest

Share This