Valley First

Investment Planning

If your spouse passed away, would you be able to manage your investments alone?

“My grandfather was young when he was diagnosed with a rare form of cancer. He and my grandma had just returned from a trip to Hawaii. He complained of feeling unwell, of being unusually tired. Within three months of his diagnosis, my grandpa succumbed to his illness. My grandma, having been married for nearly three quarters of her life, was suddenly alone. As a teenager I watched as she struggled to manage through her sadness. Life had thrown her unfair and unexpected curve balls, just at the moment she should have been able to sit back and finally relax. At the time I didn’t understand that she was also suddenly alone making crucial financial decisions that would dictate her quality of life. I know they hadn’t sought expertise to be ready for this unhappy scenario.”

Start with some advice.

Losing a loved one is a traumatic experience and along with the emotional strain will come a long list of things to take care of and various matters that you are going to have to deal with on your own. If your spouse is the one that’s handled your finances until now, it may be difficult for you to make sense of your investments and take over managing your financial affairs. Fortunately, there are a few simple do’s and don’ts both of you can take check off your list right now to help ensure you can make the transition on your own if need be.

Here are some starting points:

  • Do your investment planning together
    Don’t divide up the financial planning duties—it’s a two-person job. Sit down together and inventory your financial holdings, discuss investment options and make decisions and plans jointly. You should both attend meetings with your advisors.

  • Do get your documents in order
    A will is the absolute minimum for documentation (make sure your spouse knows where it is!). You can easily add personal or health directives and power of attorney. Choose your executor carefully. Make sure they understand the extent of the duties and obligations involved – it can be a difficult and time-consuming process. Your will is a living document and you need to update when significant life events occur (births, deaths, property purchases, etc.). As you grow older you may have grandchildren or even great grandchildren that you want to leave a little something behind for. If you are gifting assets, make sure to draw up the proper paperwork to avoid arguments after your death.

  • Don’t keep your kids in the dark
    By the time most of us reach retirement age, our children are grown. Holding a family meeting to discuss the inevitable doesn’t have to be taboo. Let them know about your financial situation and your plans for your assets when you’re gone.

  • Do investigate your pension details
    Do you know the amount of survivor or death benefits you’ll receive from a pension(s)? Are you aware of any exclusions or clauses that may take effect when the pension holder passes away? For example, if your pension was set up to maximize benefits while you are alive it could seriously affect your spouse’s income.

  • Don’t leave any skeletons in the closet
    If you have any debts or financial obligations that you haven’t shared with your spouse, now is the time. These obligations will not disappear upon your death and your spouse is going to be on the hook for paying them down.

  • Do make insurance part of your plans
    Even if you’re over fifty, reasonably healthy people still have many insurance options to help ease the financial burden if you or your spouse fall ill or pass away—loss of income, critical illness and long-term care are just a few ways you can protect your retirement income.

  • Don’t be afraid to seek professional advice
    In addition to the emotional strain and all the other details to take care of when someone passes away, trying to act as executor for a will or choose between investment options is often too much to process at once. Financial advisors not only help with investments, they also have a network of other professionals they can bring in—estate specialists, for example—and it may be a lot more affordable than you think.

Make it personal.

While the tips and reminders above are valuable, a critical part of your financial planning process should be seeking advice tailored to your situation. Book a free consultation with one of our highly accredited financial planning experts.

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We encourage you to visit a financial planning expert at any of our branches for more information on how Valley First can make things simple!