Ask An Expert

If my partner were to die suddenly, would I be okay financially?

Question

Answer

I don’t get asked that question, but that situation came up twice in the past year. Now I bring this topic up with every client household.

It’s tough enough to lose a partner or spouse-the shock and grief but to not know if you can maintain your lifestyle or have enough to pay the bills is devastating.

When I ask couples if they have a plan for retirement or if one of them dies, -most of the time, they have only had a very general discussion. One spouse usually knows about what they have saved, while the other is uninformed. Neither can say definitely how much it costs to live per month and if the savings/investments they have will generate income to cover those costs for the rest of their life.

In the first case I dealt with, the surviving spouse was able to maintain her standard of living because there was a pension and a life insurance policy. This couple was only in their 50s, neither of whom had health issues, and yet the spouse died in his sleep. It took some time to piece together where the accounts were and set up payments. This would have been much easier if a written summary had been maintained of accounts, passwords etc.

In the second case, the surviving spouse didn’t know how to get into online accounts to pay bills which the deceased spouse had always done. Surprisingly it turned out the deceased spouse had several credit cards with large balances that were unknown to the surviving spouse. Sadly, the 401k contributions for the deceased spouse were very minimal and not enough to pay off the surprise credit card debt. In this case, the house will have to be sold and standard of living will change. This couple was in their late 50’s.

I encourage everyone whose death would impact the loved ones in their household to have the discussions and develop a plan. You never know what the future brings and you want to review your plans every several years as your income or resources change.

I have a one page Checklist for a “Drop Dead File” and a one page checklist for “What to do when a spouse dies” that I can gladly share with anyone. These are great for facilitating the discussion. Email me for these checklist at NothJoann@gmail.com