Hello Candor Family!
Last month we buried the man who was not only my friend, but also my father-in-law, confidante, and one good mentor. He was experienced in finances, industrial fabrication, asset recovery, history, politics, and various other legal matters. Moreover, he was family. He was my wife’s mother’s husband of twenty-two years, and the man my girls called “Grampy” their whole lives. He left us with many joyful memories, but also an absence that won’t easily be filled.
My dear mother-in-law had experienced loss before, having lost her first husband to cancer in 1998 while they were in their forties. She commented that it was a blessing to have two good husbands who loved the Lord in her lifetime. Her cheerful heart is a testament to her faith and her joy in Christ. While we were traveling, many stories came up about the goodness of those godly men, and I was reminded how precious the spousal bond is.
In seventeen years helping clients with financial plans and the changes that inevitably come, the most common transition is the death of a spouse. Unfortunately, it has often been the wife who is left to defend her home, juggle new things, work through the estate process, and carry the mental burden of the household, all while trying to grieve.
Not to say that men aren’t affected by loss. But statistically, women live longer and with that comes more financial need. Women are also more likely to need long-term-care assistance beyond what Medicare will pay for. Even families who do plan often don’t prepare for a long life, and women are almost twice as likely to face the financial risk alone.
Financial literacy in the U.S. has declined compared to the rest of the developed world. In a 2018 study by the Milken Institute, they reference 2014 data from S&P survey that shows our nation’s adults trailing thirteen countries.
On the flip side, financial matters have grown more complicated in just the last decade. We have digital capabilities to send and receive funds, trade securities on our phones without a financial advisor, and check out at the store with a wave of a smartphone. Political and social shifts are also changing the landscape. Even social security is web based and direct deposited. Artificial intelligence came up strong this year, and many believe it will affect health care services greatly.
In a nutshell, finances are getting more complex, but our adults are not keeping up. In most households, the spouse who is most likely to finish the race alone is even less prepared. I’d like to leave you with some ideas that may be beneficial in the event of a premature loss.
Legal Prep:
Go see an estate attorney. Update your will, and make sure someone has Power of Attorney, and that the powers fit what you want them to do. (In-house POA’s that some financial companies offer are not as effective and can even serve as a tether to that financial institution. Go get a real POA and you’ll be able to use it anywhere.)
Have a living will or “advance directive.” Give it to your loved ones who are decision makers and tell them how to use it. Your attorney can help you build it to your exact specifications. This one thing can save your loved one’s so much time, energy, and stress.
Be sure to tell your attorney if you have an LLC or other company. Often these are overlooked in the estate planning process.
Expense Planning:
Plan for income loss. Many couples experience some income loss at first-passing due to the way pensions and social security work. Talk to your trusted advisor about how this might affect your spouse and plan accordingly.
Plan for medical expenses. Medicare doesn't pay for everything. My financial planning software estimates about $7,200/yr per person in out-of-pocket medical costs today-and it's pretty accurate. Make sure your financial planner is including this expense in your goals. They can also advise you on what type of account to use to best reach that goal.
Consider long-term-care insurance or have a plan to pay for LTC assistance yourself. If you have an existing policy, don't let go of it without careful consideration and advice. New LTC plans can be purchased if you are eligible, but they are not cheap. Today we have an array of options for LTC insurance, but due to rising health care costs, they don't make them like they used to.
Make sure money is available to the surviving spouse. Depending on your state's laws, brokerage and investment accounts can get “frozen” when an owner dies. There are many reasons estates can be delayed, and it's important make sure your loved one has access to liquid funds. Ask your financial institution, “What happens if one of us passes?” And make the necessary provisions ahead of time. Three to six months’ expenses is usually a good rule of thumb.
Other Stuff:
Keep a record of who has what. The original Last Will and Testament must be kept somewhere safe and accessible to your executor. Having it in a lock box can be a disaster if no one can get to it. Make sure your executor knows where it is and can get to it after you are gone.
Security is always imperative to a recent widow. They want to feel safe in their home, and often will ask for some improvements to make the feel better about being there alone. New windows, doors, locks and security cameras are usually on the ticket. Automatic generators are often looked at too. Having things buttoned up safely is another way to say "I love you."
Make a cheat sheet for each other. Many times, couples will split duties and never think about it. It’s difficult to do things by yourself when your spouse passes, and so much worse when one is bereft. Things like combination lock codes, maintenance workers phone numbers, schedules for fertilizing the lawn, can keep things from falling apart when you aren't there to remember them.
In closing, I’d like to share a quote from American Psychologist William James, who said, “The great use of life is to spend it for something that will outlast it.” There aren’t many things that will last longer than we do. And when I ponder this idea, I realize that the things that matter the most aren’t measured by money. Most of us know this logically, but oftentimes forget as we run the race we see around us. Jesus told Martha that, while she meant well, it was Mary who had made the better choice, to spend her time with him. This is a picture of us as we toil over the urgent, trying to achieve long-term joy with our work. But Martha couldn’t enjoy peace because she was stressed and jealous. How am I any different, and what can I do to make sure that I and my family have the joy that we so desire?
Will the urgency of this world succeed in robbing my peace? It will if I let it. But I can choose better, and so can we all. An ounce of prevention is worth a pound of cure. And the ideas above, while simple, can give us and our families the peace to enjoy our years to their fullest.
Always with candor,
Ivan