When you’ve been half of a couple for many years, the loss of your partner can feel like losing a part of your own identity. Whether due to divorce or death, the transition from living in the plural “we” to the singular “me” is one of the most difficult adjustments to make. Suddenly, all those shared experiences, inside jokes, shared responsibilities, and plans for the future now only reside within your own memories. The journey of rediscovering yourself as a singular person is filled with profound grief, challenge, and opportunity. Meanwhile, you suddenly have dozens of administrative and financial tasks on your plate, and have become solely responsible for the business of your household. 

The first hurdle is simply wrapping your mind around your new reality and legal status as a widow(er) or divorcee. Financial matters take on an entirely new dynamic when there is only one income to manage household finances or the loss of a primary breadwinner’s salary. Insurance policies, wills, assets, and debts all require revisiting with significant decisions to make alone. Simple acts of budgeting for one person’s living expenses after splitting costs for so long can be daunting and laced with feelings of insecurity.

There is so much to address on this topic. In this article we’re going to focus on how you can best prepare now, BEFORE a sudden change, and stay tuned for the next installment: what to do if you find yourself suddenly without your partner.

Preparation is Key

The first step is to ensure you AND your partner have a thorough understanding of all household finances and accounts while your spouse is still around. Too often, one spouse handles the majority of money management, leaving the other partner out of the loop on important details like account numbers, creditors, insurance policies, and investment portfolios. Make a concerted effort to review statements, policies, and records together so you both have a clear picture of income sources, assets, debts, and expenses. Perhaps you can use this as an opportunity to connect and do something special while having this conversation. 

Here are some areas you need to explore:

1. Assets
   1. Banking – where are the checking and savings accounts held? Are you named on all accounts? Do you have online banking logins?
   2. Investments – Where are they held? Are you named as a beneficiary? Do you have online account logins? Is there a financial advisor you can call to guide you? 
      1. Retirement accounts: 401k, 403b, IRA, Roth IRA, Inherited IRAs 
      2. Brokerage accounts: Trust, TOD, Individual, Custodial
      3. Direct Investments – do you see stock certificates or have gold or silver lying around?
      4. Crypto or App-Based investing – where is it held and do you have the login credentials? Are you named as a joint account holder or beneficiary?
      5. Limited partnerships or private investments – names of each partnership, percentage held, and contact information for liquidation.
   3. Life Insurance – who are the beneficiaries and where are the policies held?
   4. Physical assets 
      1. Cars/RVs – are you on title? Where is the pink slip?
      2. Home(s) – how are they titled? 
2. Debts
   1. Credit Cards – are you on each account? Do you have online logins?
   2. Mortgage – where is it held? Who is on the loan? Can you or your partner afford to make the payments on your own?
   3. Student Loans – you may not have to pay them off if the account holder dies, depending on the type of loan and your state. 
3. Income Sources – understand all current and future sources of income, and how that would change in the case of death or divorce.
   1. Earned Income – W2 Job or business income, iI.e. what you bring in from actively working. 
      1. If you were to suddenly pass, is there a life insurance payment from work?
      2. If you own a business, what happens if you pass? Do you have a succession plan? Does your spouse have access to necessary passwords and files to either take over or sell your business?
   2. Pensions and Annuities – do payments continue for a spouse or children after death?
   3. Social Security 
      1. When a married person passes away, their spouse is entitled to either their own benefit or your full benefit, whichever is higher. You do not continue to receive both payments upon death. This surprises many retirees.
      2. In the case of divorce, you are entitled to spousal benefits if:
         1. The marriage lasted at least 10 years.
         2. You have not remarried.
         3. You are at least 62 years of age.
         4. Your ex-spouse is entitled to collect Social Security retirement or disability benefits.
   4. Rental or partnership income – have you made investments in residential or commercial rental property? Are there investments in Limited Partnerships, Oil & Gas leases, or any other private placements? Do these investments continue upon death or divorce? 
4. Tax Returns
   1. Do both of you have access to past returns? That may be a Turbo Tax login, IRS login, paper or digital files.
   2. Ensure each of you has met the CPA or tax preparer and knows how to contact them. Ensure you both have access to the CPAs portal/vault!
      
      

1. Your Estate Plan
2. Core estate planning documents for everyone include:
   1. Powers of attorney for financial matters 
   2. Advance healthcare directives 
   3. Wills
   4. Revocable living trusts. 
      1. A living trust offers control over assets for beneficiaries, including provisions for distribution, income, and principal.
      2. Assets should be titled in a revocable living trust to avoid probate and allow for a step up in cost basis. 
3. Digital assets, such as online banking and social media accounts, should be considered in estate planning. 
   1. Be sure to keep passcodes up to date and available to your spouse. This includes your cell phone! Pro tip: use a password keeper like LastPass.com, so you only have to update one password with your spouse. 
   2. Name a successor owner on all of your social media accounts, or ensure your spouse has access to manage the account.
4. End-of-life care – do you have a long-term care policy? If not, how will long-term care be funded? 70% of adults aged 65 years and older will require long-term care at some point. The average length of stay in long-term care is 3.2 years, and costs can range from $10,000 to $20,000 per month. That is $300,000-$800,000! Ensure one of you isn’t left destitute by planning for this expense in advance.

The “White Envelope”

While it’s no fun to think about such matters, we all know that death is inevitable, so let’s prepare our loved ones properly. The “White Envelope” is a document you prepare with instructions and passcodes that don’t have a place in other estate planning documents. It can include the following:

1. Final wishes – do you want to be buried or cremated? What kind of celebration of life do you prefer? Being specific about your preferences for the memorial service, such as location, songs, scripture passages, and speakers, can help avoid conflicts and reduce the emotional load among family members.
2. Letters to loved ones – can you imagine having a hand-written letter from your mother or father? It would be this author’s most prized possession! Take a moment and do this for your family.
3. MOST IMPORTANT: it must contain your passcodes and instructions on how to access important information. It’s a best practice to have a physical envelope, which you can seal and sign so you feel confident it’s only accessed upon your death. Don’t keep this on your computer, especially if you’re not 100% sure they have access to the machine and its files. Include your computer password. 
   
   

Additional Pro Tips and Best Practices 

1. Try swapping roles with your spouse once in a while. They always pay the bills? This month you login and do it. She usually cooks? He gives dinner a shot for a week. This does three things:
   1. Enhances your understanding of all responsibilities in the household. Usually this leads to a bit more appreciation of each other. 
   2. Gives you an opportunity to receive guidance and mentorship from your spouse if you don’t know how to do something. 
   3. Ensures you are ready to take over should the worst happen. 
2. Create a home operations manual to provide important information for daily tasks and emergencies.
   1. Include phone numbers for your housekeeper, gardener, pool service, neighbors. 
   2. Where to locate important documents in the house.
   3. Lists of bills and recurring expenses with information on how to pay them. 
   4. Location of water and power shut off, how to treat the pool water, password to the security system, etc. 
3. Review your estate plan every 3-5 years, or when you hear about law changes passed in Congress.
   1. This is a great time to double-check all beneficiaries on your financial accounts.
4. Get help – Attorneys, CPAs, Financial Planners, Spiritual leaders and counselors can help you through these conversations and ensure your plans are legally and financially sound. 
   
   

While we loathe to think about losing our spouse, preparing for this eventuality can truly reduce the burden on us. The key is to be proactive, communicate openly with your spouse, and seek professional guidance when necessary. 

Information is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products, or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this post (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of Angela Wright, an Investment Adviser Representative of Gemmer Asset Management LLC“(“G”M”) and should not be regarded as the views of GAM, or a description of advisory services provided by GAM or performance returns of any GAM client. References to securities or market-related performance data are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Please see disclosure information: https://www.getwrightwealth.com/disclosure/.