The Gift Women Really Need

When I shared the first draft of my financial checklist book with a publisher years ago, his reaction surprised me. “This is a ‘honey, I love you’ book!” he said. “I am going to get this book for my wife for Valentine’s Day and tell her that my gift will be to get everything on the checklist completed for her so that she won’t have to worry.” Wow, I thought, that really is a loving husband.

Beyond Valentine’s Day

Whether it is gift giving in the month of love (like Valentine’s Day in February) or another time of year for birthday, anniversary, or another gift giving celebration, maybe it’s time to be selfish and give a gift to ourselves.

Even if we don’t have a spouse, or a spouse like this publisher who will do the work for you, getting your financial house in order is truly a gift worth spending the time on to save money and stress later for you and your family.

The Morbid Details

We need to face the facts. Statistically, we are the ones left to deal with life after the loss of a spouse. 70% of all married women will experience widowhood. 80% of married women will die single whereas 80% of married men die married. And when we add in spouse health issues, 90% of all women will eventually be solely in charge of their household finances. Those facts should convince you to basically prepare for the inevitable.

A long-time friend always made me chuckle when he introduced his wife of 30+ years. He would say, “This is Kathy, my first wife.” Despite his sarcastic humor, it made me think twice when I recently read an article by a writer who realized that his current wife will also likely be his future widow. The article was titled, “She’s Cute. She’s Smart. She’s My Future Widow.”

The facts continue to confirm that assumption. 80% of the 1 million Americans who lose a spouse each year are women. Women outlive men in every country in the world.

The Solution: Getting Financially Organized

So, we women need to get comfortable, or have someone in our life who helps us be comfortable, with our financial life. Getting financially organized is a gift to ourselves. Let’s clarify what it means to be “financially organized.” In my experience, it breaks down to being able to answer three questions.

Question #1: Do You Know What You Have?

You may or may not be able to rattle off the totals at the bank, in IRAs, property values, etc. But information in your head is no good to someone either assisting you if needed or taking care of things after you are gone. If there is no written financial inventory when it’s needed, because you are in the hospital or gone, means someone will have to put together the puzzle pieces found around the house at an already stressful time.

And the devil is in the details. How helpful is it if you have created a net worth statement, for example, which often requires that you just list totals at the bank, a total IRA balance, and a total real estate value? The detail of: where are those accounts, how are they titled, do they have beneficiary designations on them, etc. will all need to be known.

Why not summarize that all in one place. I am a fan of having a summary binder, with a detailed net worth summary in the front and tabs for year-end statements of assets. Further detail is available in the files.

And how about your estate planning documents: a will/trust, powers of attorney for health care/mental health care and financial? Have you drafted them, and do they reflect your current wishes?

Best practice is to review documents every 3-5 years to consider life/law changes.

Question #2: Can Someone Else Find Your Information When Needed?

Don’t make it a scavenger hunt for your family to locate your financial inventory, statements, and estate planning documents. You should tell one of your named fiduciaries where to find everything OR leave them a sealed letter of instructions for when the time comes OR create a document location sheet outlining that detail. There are too many stories out there of families that never found the will or found it in the freezer or under the bed or in a box with the Christmas gift wrap.

Question #3: Have You Told Your Assets Where to Go?

Once you have compiled your financial inventory, your master resource list, your asset list, your net worth summary or whatever you want to call it, then you need to review it in detail. Where did you tell the bank to send your savings account after you are gone, for example? Translation: how is the account titled? Is it joint, or in your name alone, or in the name of a trust?

The bank knows where it goes if it’s titled jointly or in the name of a trust. But if it is only in your name, unless you added a POD (Payable on Death) designation on that account, they will wait for probate (depending on the size of the account and the probate limit in your state) to confirm where that account goes.

And how about your IRA? Did you keep your beneficiary designations current, are the people listed still alive and also reflecting your wishes? And do you have a contingent beneficiary listed in case you and the primary beneficiary are in a car accident together, for example?

Is Your Financial House in Order?

Having your financial house in order comes down to having a detailed asset list, organized documents that are current and findable, and making sure your “where do I want my assets to go?” answer is in writing at every institution because beneficiary designations override the will/trust. Treat yourself to this gift knowing it takes a bit of time to create. But it’s SO worth it!

Let’s Have a Conversation:

Estate Planning is the most procrastinated aspect of financial planning. Does it help to think of it as a gift to yourself and your family? What motivates you to take action on this area of your financial life? Have you seen how this gift can make a difference?