Summary: Careful estate planning can help provide financial security for surviving spouses. In Siedentopf Law’s latest blog, we discuss some planning Items to consider, such as: updating accounts and beneficiaries, designating a Power of Attorney, drafting an Advance Directive, and reviewing important medical and financial documents.
More widowed women are enjoying financial security. That is according to a recent study by the Center for Retirement Research at Boston College. Researchers found that in 2014, only 13% of widows were living beneath the poverty line, which is an improvement from 20% of widows living in poverty in 1994. (Note: for this study, the average age of the widows was 67-years-old. The poverty threshold, as determined by the Census Bureau, is $12,490). Why the improvement in numbers? The researchers credit women’s advanced work histories and better educational opportunities. Another way to help provide financial confidence is with estate planning. There are a number of things spouses can do to ensure that their family and their assets will be protected.
Get Your Paperwork Organized
The first step is getting your household paperwork organized. Most people have a surplus of information (financial and medical) in multiple formats and places. You want to find all of the important documents or files, consolidate them, and put them in order. Items to look for include: account statements, beneficiary designations, tax returns, recurring bills, any existing estate planning documents, insurance information, and medical records. It is a good idea to store these items in a fireproof, secure box. Be sure to also include a list of important contacts (accountant, lawyer, doctors) and a master list of account usernames and passwords.
Update Any Shared Accounts
Once your financial paperwork and recurring bills are collected in a central location, it is beneficial to look over the bills so both spouses are aware of the items, understand which accounts cover the expenses, and which contacts are associated with these documents. Essentially, both spouses should know what is due, when, and how to access the accounts. It is also a good idea to double-check your credit cards or shared banking accounts to make sure that both spouses names are on the account – or that the accounts are in line with your current financial wishes.
Designate a Power of Attorney
A Power of Attorney is an estate planning document that enables a person to act on your behalf in the event of your disability, whether due to illness, incapacity, or otherwise. The power of attorney can manage affairs including financial matters, real estate transactions, and other legal decisions. In other words, the power of attorney can keep your financials and business matters running, even when you are not able to. A person can choose when this power of attorney goes into effect (ex: immediately, at a specific future date, only under specific circumstances), however, these powers end at the principal’s death. Watch our video on Georgia law and how spouses do not have automatic power of attorney for each other.
Setup Your Advance Directive for Health Care
An Advance Directive (sometimes called a Living Will) is a form in which a person lists his or her health care preference in detail (ex: treatment, medical testing, care options). It puts family members, doctors, and hospitals on notice, and is only used if the person is unable to communicate his or her own wishes due to illness or incapacity. An advance directive not only memorializes a person’s medical wishes, it can also ease the stress of family members, knowing that they are making the decisions that you would want. Read more about navigating Georgia’s Advance Directive for Health Care.
Review Your Insurance and Financial Plan
This is also a good time to review your financial plan. Life insurance can be a good way of making sure your spouse is financially protected, but those needs change over time and depending on life stage, you may desire to adjust your coverage up or down. It is incredibly important to work with a knowledgeable and reputable financial planner, preferably one who is a fiduciary. Read more about why fiduciaries are essential for estate planning.
Review Your Financial, Medical, and Estate Planning Documents
Just as important as drafting your estate planning documents is making sure to review and update those documents as needed. You should check items such as beneficiary designations after major life events like marriage, births, or deaths of family members. Reviewing those estate planning documents will ensure that your wishes will be honored as you intend. Read more about the importance of updating beneficiary designations.
If you have additional questions about estate planning, please contact Siedentopf Law at (404) 495-5729 or via our online form.
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