Who knows about your will?

Will Location and Knowledge of Contents

Believe it or not many spouses have no idea what is in their partner's will. As such they aren't aware of their partner's preferred burial arrangements, beneficiaries and/or asset distributions. This makes dealing with that person's estate much harder once the individual dies.

As a matter of course, both partners should sit down together, take out their respective wills and talk about funeral arrangements and preferred asset distributions. Doing so will ensure they are both on the same page, and are prepared should a serious illness or death occur suddenly. In fact, both partners should sit down at least once a year to discuss any changes in preference or changes in circumstances that might have occurred since the last talk.

In addition to knowing and understanding the contents of the will, it is also important to be aware of its physical location. If a death occurs, an original copy of the document will be needed in order to disburse assets and/or to probate the estate.

As a tip, when wills are drafted there are usually three or four originals. A good way to file these originals is to keep one at home, one in a safety deposit box, one with a trustworthy relative, and one at your solicitor's office. That way, you'll have quick access to this document, no matter what the emergency.

Debts

Every once in a while you'll read about a spouse that has to sell his or her home in order to pay off the deceased partner's debts, tax penalties, and more. Both partners should be fully aware of any outstanding debts as well of possible solutions for satisfying them if the debtor partner dies. These solutions include life insurance, the sale of personal items, and more. Also, if possible consider including your financial planner, an accountant and/or other professionals in these discussions.

Account Access

It's not uncommon to hear about a family member who has passed away unexpectedly and left a surviving spouse with a bank account that is in the deceased's name only. In this case, the money may be held until the estate is settled. The bank's hands are tied in these situations, and it can take months to get this frozen account thawed. The surviving partner will have no access to his or her money and may have to rely on other people's goodwill or assets until the estate is settled. To avoid this scenario, make sure that all accounts are titled in both partners' names and held in joint tenancy. Another option is to make certain that the account is marked "payable on death" (or POD for short). This will allow the surviving partner access to the funds. Check with your bank or lending institution for more details before opening and titling any account.

Leave Letters

While it is in no way legally compulsory to do so, both spouses should leave letters or documentation to each other detailing what to do if the other dies. The letters should contain all relevant financial information (credit cards, bank and brokerage account numbers, etc.). It should also contain passwords and suggestions for resolving problems as well as a list of trusted advisers who might be of help during tough times. Finally, preferred burial arrangements should be listed as well.

In short, try to spell out all of your preferences in painstaking detail so that your distraught spouse is able to make rational decisions upon your death. He or she will be in a better position because of this, allowing the spouse the time to mourn instead of using the time to find old tax files or names of lawyers.

Establish an Emergency Fund

When the surviving spouse is the financially unsavvy spouse, he or she might not know which assets should be sold or which accounts should be tapped to cover funeral expenses, attorney's fees or other bills. For this reason, it makes sense to set some money aside (preferably a few months of living expenses - so that the spouse can survive and pay for incidentals). Consider keeping this money with a friend, or in a fireproof safe in your home, or even in a joint account (again marked "POD") at the local bank.

If nothing else, this step will help reduce the worry of where funds will come from in the confusing days and weeks after the death of a spouse.

Don't Put Off Learning

While the less financially savvy partner in a relationship might never be able to match the capabilities of his or her spouse, everyone can (and should) learn to balance a cheque book, pay bills, read financial statements and invest. To that end, both partners should sit down together and share their knowledge while they are alive and well. Couples should also consider honing their financial acumen with books, courses and or lectures on general investing.

The goal of this work is to make certain that both spouses are financially literate. If nothing else, this will help to ensure the proper handling of the joint estate after the first spouse passes on.

Bottom Line

In order to make certain that your spouse and/or partner is able to carry on after your death, you must plan while you are alive. That is, you must educate your spouse about the nature of all of your assets and debts. In addition, you must make them more aware of your preferences for burial, as well provide them suggestions so that they may cover expenses in case of emergency.

Please feel free to talk to us about your estate planning issues.

Source: Investopedia.com

The information in this article is of a general nature only and should not be acted upon without first seeking personal financial planning advice. This article was provided by independently owned AFS Licensee (No. 236855) Direct Advisers Pty. Limited. They may be contacted on 02 6583 7588 or enquiries@directadvisers.com.au for a free consultation or further information.