Someday, you’re going to die.

Thankfully, it probably won’t be at the hands of some enormous gladiator with a mace and a pet lion, but no matter how you go, take a minute right now to imagine what will happen next if you leave a spouse behind.

If you’re a confident DIY investor, with a system you’re happy with and finances firmly in the black, you’ve done right by yourself and your family in life, but you’ve created a system that your spouse might not be able to maintain.

Related: So you’ve been asked to be an executor

Efficient partners divvy up the work that goes into running a household, it’s true, but most families only have one money nerd.

Either by choice or by necessity, one spouse builds the spreadsheets, checks the statements, and rebalances the investments, while the other…does not.  Not as often, anyway, and while it’s easy enough to take over laundry or car maintenance, taking over the finances after years of low participation will leave your spouse vulnerable to confusion, fear, and indecision.

You see, it’s all well and good for you to stress-test your finances, but you’re not the one who’s going to experience the stress, are you?

If your spouse passes away before you, you’ll have the experience and knowledge to deal with the financial side of things, even in your grief.  But if you die first, your spouse probably won’t have the confidence to flip the autopilot switch on your money.

Related: Paying the price for financial procrastination

In those first few months after you die, your spouse will be faced with too many decisions to count, and so many little but necessary tasks that the big job of figuring out what the new financial picture looks like starts to seem overwhelming, especially for someone who hasn’t been in the driver’s seat for a long time.

How to prepare financially for the death of a spouse

How to prepare financially for the death of a spouse

Let’s use my husband as an example, and pretend that A) we’re retired and comfortable, and B) he has a longer life-expectancy than I do.

He doesn’t have much to do with the month-to-month and year-to-year minutiae of bill payments, savings plans, and investing, although he’s aware of our general direction at any given moment.

He’s a smart and capable guy, but if 67-year-old me up and died on him, he’d be very tempted to walk into the nearest bank, drop my will and death certificate on the desk, and say “you handle it”.

A partial list of the to-do list he’d face in the first few months goes something like this: notify OAS and CPP of my death and wait to hear how much his monthly income will be reduced by, transfer registered accounts to his own name and integrate the investments with his own, cancel my credit cards, remove my name from our joint bank accounts, pay bills for the first time in forty-two years, navigate probate if it’s necessary, remember where we keep documents we haven’t referred to in decades, change the name on our utilities accounts, decide what to do with the life insurance money…

Related: Assessing your estate plan

While a lot of these small tasks can be made easier with some planning on both our parts, the very last thing I would want for him is pressure to make decisions just like I would in the midst of all that busy-work and grief.

I’d hate to see him in the position that I’ve seen so many grieving spouses: in the desk across from the bank representative two weeks after the funeral, putting it all into the XYV Monthly Income Fund with a MER of 2.63% because he just doesn’t have the mental energy to withstand the sales pitch.

But: I’ll be dead. My opinion won’t matter anymore, and if he doesn’t feel up to taking over “just like I would”, and wants to hand everything over to someone else so he can concentrate on doing whatever it is he wants to do, so be it.

I would want it to be a reasonably informed decision, though, which is why our disaster plan – no matter how comfortable we get – will always include a life insurance policy or jointly held cash reserve to specifically buy time for him to think.

Related: 5 ways to take control of your finances

Said plan also includes joint bank accounts, updated password lists, and – hard for this spreadsheet lover to do, but necessary – he rebalances our investments every other time the calendar tells us to.

I don’t believe there’s any way to truly prepare for the death of a partner.  What I do believe is that – financially speaking – there are habits you can put into place now, and specific arrangements you can make that will take at least some of the burden from your spouse in those first few months when it seems that everything has changed.

Sandi Martin is an ex-banker who left the dark side to start Spring Personal Finance, a one woman fee only financial planning practice based in Gravenhurst, Ontario.  She and her husband have three kids under five, none of whom are learning the words to “Fidelity Fiduciary Bank” quickly enough.  She takes her clients seriously, but not much else.

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19 Comments

  1. Financial Uproar on May 22, 2014 at 8:08 pm

    Aww, now I’m bummed out. 🙁

    It’s okay though. I’m going to stay alive long enough to download my memories into a computer. I won’t quite be immortal, but close enough.

    • Sandi on May 23, 2014 at 3:40 am

      Emoticon. I blame your imminent departure.

      • Robert on May 23, 2014 at 7:11 am

        Sandi, don’t you think that is a little too much inside information here? Didn’t improve my day and I don’t even know him/her.

  2. Tracey H on May 23, 2014 at 5:44 am

    So true. Last year my Mom died and Dad went through all of this. At least they had a financial planner who handled their investments (a trusted one)and who rebalanced the portfolio, etc. But he did have to learn to pay the bills, etc. (as well as learn how to cook, do laundry, and other things). He rose to the challenge very well (at the age of 89!). He died last week at age 90 and I’m dealing with it all now.

    Last year, when Mom died, we realized my husband is a carbon copy of Dad. Doesn’t pay bills, hasn’t filled out a tax return in 35 years, doesn’t cook, had to ask me how to get money out of the ATM and asked which machine is the washing machine (I wish I were joking). So we’re both going to work on bringing him up to speed in case something happens to me (I’m in my 50s so I hope to live decades more, but who knows).

  3. L on May 23, 2014 at 5:48 am

    Interesting post! I’ve designated 2014 as the year of getting a will done and putting together a folder that will give exact, step-by-step instructions for my family to go about dealing with everything. (Though I’m in good health and it should be unnecessary for quite some time! LOL)

    This gives me a couple other things to add to the list, so thanks! 🙂

    • Sandi on May 23, 2014 at 9:04 am

      Hey! There you are, in your new blog home. I like it!

  4. Michael James on May 23, 2014 at 6:22 am

    You definitely need to get the non-financial spouse involved — including actually making trades, etc. It also helps to have as simple a financial plan as possible. I’m slowly building up to a spreadsheet that tells me what to do in all situations I can foresee.

  5. Gary on May 23, 2014 at 6:34 am

    i went through this with my mom 2 years ago. it is a confusing journey when you are grieving and the funeral home, bank and others want your attention. thank you for this excellent advice sandi . i am printing this off and giving a copy to my son and daughter ( and my wife if she’ll read it– she is scared to death of banks! )

  6. Robert on May 23, 2014 at 7:08 am

    “some enormous gladiator with a mace and a pet lion” – you are having solid sleep. I want dreams like that.

    “wait to hear how much his monthly income will be reduced by”
    Wouldn’t your last pay stub tell him more or less?

    This stuff seems much easier for the married, and especially the only-once-married which I guess is the minority these days.

    • Sandi on May 23, 2014 at 9:05 am

      I was thinking specifically of OAS and CPP in my post-retirement imaginary scenario, so the paycheque probably wouldn’t enter into it.

  7. Dan @ Our Big Fat Wallet on May 23, 2014 at 8:15 am

    My wife is definitely the ‘non-financial one’ and I’ve been trying to get her more involved in the day to day stuff. It’s hard because she has no interest in it but I think it’s necessary for couples to communicate on all aspects of finances (and be actively involved)

  8. Loonie Lover on May 23, 2014 at 4:38 pm

    These very thoughts have occurred to me, but my wife comes from a culture where people are very uncomfortable speaking about death. Plus, she really, really isn’t interested in investing.

    I guess it’s up to me to leave written instructions for her to follow. Best case scenario, at least one of our kids takes an interest in finances, and is old enough by then to be able to help her out.

    On a related note, I’m actively encouraging my parents to simplify their investments, and as much as possible, to unify them in only one or two accounts at most.

  9. Your spouse may not be around to look after your finances when you pass away, so it’s important to get your children involved as well. It’s a good idea to have a list of accounts, so they don’t have to go digging through your paperwork. Also, don’t put your will in your safety deposit box – it will be a pain to retrieve.

    • Sandi on May 25, 2014 at 5:42 am

      I’m more worried about a surviving spouse whose own day-to-day finances are affected. Wills can be retrieved from a SDB pretty easily. The policy at most banks is to allow just the will to be removed by someone likely to be an estate representative.

  10. Noel D'Souza on May 24, 2014 at 2:25 pm

    Great post Sandi. Pretty much EVERY family will face this scenario at some point.

    My strategy involves the following:

    1. Simplify as much as possible. As few accounts (bank, investment, credit, etc) as necessary. This makes looking at “the big picture” much easier. Also, a simple plan is much easier to understand and maintain than a complex one, and usually is probably 95% as effective. (Yes, I pulled that % out of the air, but I suspect it’s nearly correct.)
    2. Keep your “financially challenged” (best term I could come up with after 3 hours sleep) partner advised of what’s going on, especially if you’re doing things with his/her accounts. Have a “state-of-the-union” meeting on a regular basis. Don’t worry if they don’t catch everything you’re saying. Just have these meetings regularly and consistently. Some stuff will sink in each time, and over time, a fair bit will sink in by osmosis.
    3. Have a trusted financial advisor who can help fill the void, at least on a temporary basis. Your partner needs someone they can *confidently* turn to for help in your absence. It could be a professional, it could be an experienced and helpful family member or friend.
    4. Have a written financial plan, discuss the plan with your partner (at least the highlights), and let him/her know where it is kept so he/she can take it to the trusted advisor and have them continue to maintain the plan, or review and update it as needed.

    • Sandi on May 25, 2014 at 5:43 am

      I like that strategy. No surprise there, eh?

  11. May on July 24, 2015 at 10:19 am

    This is great advice for those who have a spouse. I would love to hear what you suggest for those of us who don’t and may or may not have any children.

    • Sandi on July 24, 2015 at 1:20 pm

      My advice would be almost the same, May – keeping an updated list of accounts, passwords, and all of the other information that you typically keep in your head or in various files or notes is a good exercise for you to go through so you can communicate that information (or how to find that information) to your power of attorney in case you get ill and can’t take care of your financial life yourself for a time.

  12. Dan Shire on September 18, 2018 at 8:30 am

    My brother and I are co-executors for my dad, who passed away after a lingering cognitive and cardiac illness at 86. My brother is too busy at work (demanding job) and I recently retired (and my wife is a CPA) so I’ve been handling the day-to-day details.

    To make matters more challenging, my dad was a hoarder, we are still finding tax returns and cancelled cheques from the 1970s. Dad was a builder with multiple properties (3 at death), modest savings. We are finding cheques where he loaned neighbours and family money thousands of dollars over the years, and VISA bills with hundreds of dollars of charity lottery tickets in some months. He was taken advantage of by acquaintances and charity fund-raising firms. He kept every savings bond receipt and life insurance policy, including those cancelled or expired 3 decades ago – they all have to be investigated. It’s a nightmare.

    If you’re going to be an executor for your parents, talk to them early when they are competent to help you organize your future responsibilities. Though (youngly) retired, my wife and I are both in the process of doing the organization one of us will need in the future.

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