After You

Dennis Friedman

I HAD AN AUNT who did everything for her husband. She paid the bills, invested their money and oversaw the family budget, plus she did all the household chores.

They both liked this arrangement. It worked for them. But as they grew older, people were concerned about what would happen to Uncle Bob if he outlived my aunt. He depended on her for everything. How could he take care of himself?

My uncle could not operate a washing machine, let alone manage his own finances. Friends had visions of him sitting in his house with no electricity or gas to power his lights and appliances, because he didn’t know enough to pay the utility bills. As it turns out, this never came to pass: My uncle died first.

You might imagine Uncle Bob was an extreme case of helplessness. But there are many Americans who struggle to manage the family’s financial affairs after the death of a spouse. Want to make it easier for your spouse or significant other to take over? Try these 16 steps:

  1. Automate. Have all recurring bills paid automatically. That way, there’ll be no missed payments and all essential services will continue.
  2. Emergency fund. Have a cash emergency fund that’ll cover six months of living expenses. If you’re the primary breadwinner, this would provide your spouse with much needed money for the initial months after your death.
  3. Term life insurance. This offers low-cost financial protection. It’s especially important if you have children still at home.
  4. Fixed costs. If your spouse suddenly has to cope without your income, low fixed monthly expenses will make it easier to meet the family’s financial obligations.
  5. Consolidate. Combine your financial holdings at one or two financial institutions. This will make it easier for your spouse or significant other to locate and manage your assets.
  6. Simplify. Construct an investment portfolio that requires little maintenance—by sticking with a few broad market index funds. Two benefits: There’s no need to make sell decisions on individual stocks and no risk of underperforming the market.
  7. Financial advisor. Hire an advisor to manage your investments. This person could also provide guidance on broader personal finance issues—and assist your spouse in handling the family’s finances, should you die first.
  8. Family. Inform your adult children or other trusted individuals about your finances, so they could then better help your surviving spouse.
  9. Passwords. Tell your spouse where to find the usernames and passwords for all financial websites.
  10. Documents. Make sure insurance policies, deeds, tax returns and all other important financial papers are stored in a safe and easily located place.
  11. Beneficiaries. Review and update all beneficiary designations on retirement accounts and life insurance policies.
  12. Trust and will. Consider having a revocable living trust drawn up, so all assets pass quickly and easily to your significant other after your death. This can also save money by avoiding probate.
  13. Advanced directives. Have in place powers of attorney for health care and financial decisions. These will allow someone to oversee your affairs if you become incapacitated.
  14. Pension. Choose a survivor option for your pension, so payments to your spouse continue after your death.
  15. Social Security. Make sure your spouse qualifies for survivor benefits. You must typically be at least age 60 and married for nine months. Contact the Social Security Administration for further information.
  16. Funeral. Have a conversation with your spouse about what sort of funeral you want. This will avoid overspending at a time when money may be tight.

Dennis Friedman retired from Boeing Satellite Systems after a 30-year career in manufacturing. Born in Ohio, Dennis is a California transplant with a bachelor’s degree in history and an MBA. A self-described “humble investor,” he likes reading historical novels and about personal finance. His previous articles include Improving With Age, Summer School and Naming Names. Follow Dennis on Twitter @DMFrie.

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Rick Connor
Rick Connor
3 years ago

Great list and right on the money. I know a woman whose husband died suddenly. She had three children under 16. His life insurance beneficiary had not been updated since a previous divorce. Turned out his mother was the beneficiary. Our widowed friend was like your uncle. She had no work history or financial knowledge. The mother was concerned about ability to handle a large sum. We got the widow connected with a great financial planner who was able to negotiate the situation and help her get her life back on track.

Ken Roach
Ken Roach
3 years ago

I respectfully disagree with your recommendation to automate bills. This doesn’t help the survivor understand what bills need to be paid, when, and why. And if the survivor doesn’t understand the bills but ends up maxing out the credit card used to auto-pay those bills, then the bill charges will be denied and the bills won’t be paid. It’s better that survivors be able to stay on top of those bills themselves. Doing so will also help them focus on something other than the death of their loved one (I’ve been in that situation with my mother when my father died).

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