What Couples Think They Know About Family Finances

When it comes to estate planning, your marital status isn’t the only important factor: it’s important you’re on the same financial page as a couple. Yes, even when it comes to estate planning! See if this sounds familiar: couples report having open and honest conversations about their finances. At the same time, 40% don’t know what their partner is earning and one in ten were unable to guess it, even when given a pretty wide margin of error. Without this basic information, how likely is it that a couple can do the financial homework necessary to plan for retirement?

Wjbf.com’s article, “9 Questions to consider in planning your financial future,” reports that the Couples Retirement Study by Fidelity Investments revealed that many couples need a far better understanding of their joint financial lives. That said, many elect to divide up the tasks of money management, bills, assets and debts. Although a seemingly equitable idea, it can leave one or both without all the important financial details.

Both partners need to collaborate when it comes to financial planning, money management and decision-making. That means sharing the responsibilities of building and protecting their financial future.

To help with this, here are nine questions to consider when thinking about your financial lives:

1. What’s your philosophy on money? Consider your values, whether you’re a spender or a saver, how you use debt and what the role of money is in your life.
2. What’s our budget? Understand the cost of living and if you are able to save for future goals.
3. What do we own, and what do we owe? Take stock of your collective assets and liabilities—anything involving money.
4. Do we have an emergency fund? See how much you have and whether it’s titled in a way that gives you both ready access if needed.
5. What are our plans for our savings? Determine if you’re funding a college education, buying a cottage on the lake or preparing for retirement. Fix your short- and long-term priorities and save for them as a team.
6. How much will we need to live comfortably in retirement? Think about how each of you envisions the future so that you can plan, save and invest to meet that goal.
7. What are we saving for retirement and where is it located? Keep track of all 401(k)s, IRAs and CDs dedicated to retirement. Know the amount you’re contributing and whose name is on each account. Also, work with your estate planning attorney to ensure beneficiary designations align with your estate plan now, get verification of the correct alignment from the financial institution, and track any changes over time. That could be something as simple as rolling over a 401(k) into an IRA, or getting a new job and starting a new 401(k).
8. Where do we keep our important documents? While documents are not the only important component of your estate plan, it is important to make sure your agents under a power of attorney, heirs, trustees, etc., know where these documents are located. Make certain all your estate planning documents are kept up-to-date with any changes in your life, the law or your assets and stored in a secure spot along with tax records, insurance policies and other documents of importance.
9. Have you created an estate plan? When was the last time you spoke with your estate planning attorney? Your estate plan is important; it’s what gives your loved ones the right to carry out your wishes. But, it only works if your assets are aligned and your loved ones understand their roles and responsibilities. That’s why at Family Estate Planning Law Group, we focus on the two most crucial aspects of any estate plan: how you own your assets and taking care of your family.

Many people are unaware that the name (or “title”) on their accounts determines what happens to that asset after their death. In fact, it can even supersede your stated wishes in a will or trust. It’s crucial to ensure you own your assets consistent with your estate plan—i.e. putting a bank account in the name of a trust—and then verify that it’s correctly aligned with the financial institution. As your assets will change over time, you should be in regular communication with your estate planning attorney to ensure your assets are owned correctly and no planning opportunities are missed.

No one wants to sit down with an estate planning attorney and listen to him or her drone on, especially when you’re grieving a loved one. That’s why Family Estate Planning Law Group advocates for a Family Care Meeting. This meeting helps us ensure we take care of your family by allowing you the opportunity to discuss your plan and your wishes with your loved ones. They get to hear about the plan directly from you and have the chance to ask questions and understand their roles and responsibilities before a crisis strikes.

Working with an estate planning attorney who has this kind of ongoing client care program can be the one thing that prevents an estate plan from failing. For more information, explore our websiteand contact us to schedule your consultation today!

Reference: wjbf.com (August 24, 2016) “9 Questions to consider in planning your financial future”