How to Ensure You (Or Your Spouse) Can Manage the Family's Finances on Your Own

Does one person in your house handle your family’s finances more so than the other? It’s not uncommon for couples to split responsibilities, including managing money. Perhaps one spouse is involved in the day-to-day finances (paying the bills, depositing checks, and following the budget), while the other handles the more long-term financial initiatives, like saving for college or investing for your future retirements. For some couples, one spouse may have opted to take on the full responsibility of your family’s financial obligations because they’re more comfortable or familiar with managing money — while the other takes more of a backseat role.

There is no right or wrong way to do it, as long as you’re both comfortable. However, there may come a day when the person handling more responsibility with your family’s finances is no longer capable of doing so. When that happens, the other spouse may be on their own to pick up the pieces and forge ahead.

If you’re worried you or your spouse may not know enough about your family’s finances to continue managing your money, now’s the time to plan and prepare for the possibility. Here are a few tips for bringing everyone up to speed in the event you’re required to take the reins someday.

Meet your financial team

It’s likely your family already works with some professionals who may be able to help you manage your future financial needs. Establishing a relationship with them now, or at least having your spouse send a quick introduction, can make it much easier to reach out in the future, when you may be feeling especially stressed or overwhelmed.

Some common professionals your spouse could already work with include:

• Financial/Wealth Advisor or Planner: This person would oversee your portfolio, and they can serve as a good starting point if you have general questions about your money or don’t know what to do next. Typically, a wealth advisor will manage your portfolio, answer questions regarding your financial goals (like retirement), develop savings and investing strategies, help with proactive tax planning, and sometimes coordinate with your other financial professionals.
• CPA or Accountant: If your family owns a business, has a fairly large estate, or gets your taxes prepared professionally, you likely work with a tax professional. They will be your go-to person for any questions relating to previous returns, tax deductions or credits, and gathering the proper paperwork for filing next year’s tax return.
• Attorney or Estate Attorney: If your family has done any estate planning, like creating a will or establishing power of attorney, your spouse has likely worked with an estate attorney. This professional specializes in estate planning and preparing the legal documents relating to it.

If your spouse becomes incapacitated, it’ll be important to speak to your estate attorney and confirm all necessary estate documents are in good working order. Similarly, in the event they pass, you should reach out to your attorney. They may even store your spouse’s original will and other estate documents for safekeeping.

• Real Estate Agent: Depending on how involved you were in the home buying process, you may already be acquainted with your family’s real estate agent. If you liked them and want to use them again in the future, be sure to hold onto a copy of their business card or contact information. 
• Insurance Agents: Your family may work with specific agents or local branches for your homeowners insurance, car insurance, or other policies. If that’s not the case, it’s still a good idea to have the customer service number and any account information you’ll need to speak to an agent on your own in the future.

Take stock of all accounts

Once you know who to contact regarding certain areas of your financial life, focus next on what accounts you own and where they live. People tend to accumulate assets across various institutions — which can make it hard to track things down later.

These various accounts may include:

• Checking accounts
• Savings accounts and high-yield savings accounts
• Money market funds
• Brokerage accounts
• Certificates of deposit (CDs)
• Emergency savings
• Safety deposit box (which would be physically stored at a bank)
• 529 plans 
• Trusts

Anywhere money or assets are being held, you should know about it. You and your spouse need to create a list of all accounts and how to access them. This would include usernames and passwords for online accounts, pin numbers, physical branch locations, and any other critical information.

Review insurance policies

Most people have insurance policies, even if it’s basic auto or homeowner’s coverage. It’s possible that, depending on your financial situation, you may have additional policies as well. But unless your spouse tells you about the policy and how to access it, you may not know what sort of coverage or resources are available to you.

Common insurance policies to ask your spouse about could include:

• Life Insurance: If you have a life insurance policy, it’s important to understand first whether it’s a term policy or whole life policy. Term policies provide coverage during a certain period of time (say 10 years), while a whole life policy will provide coverage for the individual’s lifetime.

If you or your spouse do have an active life insurance policy, find out what the death benefit is and how to collect it. Most life insurance policies make it easy to apply for benefits — you’ll usually need to simply fill out a form and provide a copy of the death certificate.

• Long-Term Care Insurance: It’s estimated that around 70% of people turning 65 now will need long-term care in their lifetime.¹ To help reduce the financial burden of long-term care (which is not covered by Medicare), your spouse may have purchased a long-term care policy. If this is the case, find out what services are covered, or not covered, under this policy.
• Liability Insurance: If you or your spouse work in a particularly risky profession or have a sizable estate, your family may have liability insurance — which provides coverage above and beyond a normal homeowners or auto policy. Liability can cover your family in a number of instances, from serving as a board member on a non-profit, to dog bites, injuries on your property, and other suits.
• Home and Auto Insurance: For your more basic policies, like home and auto, make sure you know who the insurance carrier is, how to access the accounts, and what is covered. For example, your spouse may have additional coverage or riders for expensive jewelry and other collectibles.

Talk about retirement income

Your retirement income looks much different than a traditional paycheck from a W-2 job. Whether you’re already in retirement or still a ways away, you may not know where your retirement income comes from, whether it’s fixed or varied, and the impact it has on your taxes.

Talk to your spouse about your potential retirement income sources, so you can start to get an idea of what your cash flow in retirement looks like. Fixed-income sources like pension plans, annuities, and Social Security will provide guaranteed income for life — making them an important and reliable piece of the retirement income puzzle. 

The rest of your income will likely stem from a variety of other sources such as 401(k)s, IRAs, Roth accounts, investment properties, and dividends or interest.

Psst…don't forget your beneficiary designations

While you’re familiarizing yourself with your family’s financial life and retirement accounts, now’s a great time to double-check that the beneficiary designations are up-to-date on all accounts. After you or your spouse pass, the funds in these accounts will go to whoever is named the designated beneficiary — even if your will or other estate documents say otherwise.

Make a game plan

Now that you’re a bit more familiar with what’s going on financially, talk to your spouse about next possible steps. To start, have an honest conversation about any hesitations you might have with the possibility of taking over one day. 

If you feel a little overwhelmed by your family’s financial picture, you may be struggling with the idea of making major financial decisions on your own. If that’s the case, perhaps you’d benefit from more conversations with your family’s financial advisor. Or, you could talk to your spouse about streamlining and automating the family’s finances where possible. Consolidating bank accounts or rolling over old 401(k)s into one IRA — these are simple ways to make things easier for everyone.

If you’re worried about forgetting something, ask your spouse to record videos explaining things step by step, or create a binder with written instructions. Make sure to revisit and update these instructions from time to time as your financial life evolves.

One day, you may have no choice but to handle your family’s finances on your own. While it’s never easy to think about life without your loved one, take the opportunity now to prepare yourself for what could come one day (hopefully far, far away).