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It’s Halloween, and you may be thinking about watching scary movies or visiting a haunted house. But what if you did something even more terrifying? What if you talked to your family about money? It may be scary, but it is so worthwhile to have these conversations. Here’s why –

It’s common in couples for one person to serve as the Chief Financial Officer (CFO) and take charge of paying bills, making investment decisions, selecting insurance policies and employee benefits, etc. This division of labor is common because one spouse may have more interest or knowledge about financial matters, and the set-up works fine – as long as both spouses are physically and mentally healthy. Of course, our health is not guaranteed, which was the case with my clients, Pierson and Nancy. Pierson and Nancy were married for over 50 years, and Pierson handled all financial matters until he got very sick and subsequently died. Their financial and investment plans continued on the path we established over 15-plus years of working together, but Nancy was at a loss about where to find Pierson’s original will or how to pay the power bill. This lack of knowledge about her finances made an already stressful situation even more stressful. This experience also made me realize how critical it is for families to have regular “money talks” to ensure financial information is shared. I want to prevent another client from facing what Nancy experienced.

These “money talks” can be between husband and wife or an elderly parent and adult child. It may be helpful to schedule a time to have this conversation so the other party doesn’t feel like you are springing the topic on them. If you’re talking to your parent, you may also want to reassure Mom or Dad that you’re asking for information because you want to help, not because you are trying to take over.

Here are five questions to ask during your “money talk:”

  1. How are bills paid?
    • If there are multiple bank accounts, what account is used to pay bills, and what is the purpose of each account?
    • What income, if any, is regularly deposited in the bank account, and what bills are automatically drafted?
    • If distributions are being made from investment accounts, are those distributions automatically scheduled? Or is a call made to the advisor to request disbursements?
    • Are there periodic expenses, like insurance premiums or real estate taxes, paid for via check? 
  2. Where are important documents kept? The CFO likely has a filing system that works for them, so you may need to make notes about where to find things if that system does not click with you. The other option is to take over the file system yourself! Keep in mind that some documents may be in paper format, and some may be in digital format. You should be able to put your hands on documents, including:
    • Social Security numbers and benefits statement
    • Personal papers like birth certificates, marriage certificate, military discharge papers
    • Income tax returns
    • Insurance policies for medical, life, long-term care, auto, home and umbrella
    • Bank and investment account statements, including IRAs and 401ks
    • Statements for any debts, like mortgage, car loan, or personal loan
    • Employee benefits, including paystubs and employer-provided life insurance
    • Beneficiary designations on retirement accounts and life insurance policies
    • Real estate deeds, car titles
  3. Where is your safe deposit box, and who has access to it?
  4. Where do you keep a list of usernames and passwords for online accounts? Or, if a password manager, like LastPass or Dashlane, is used, what is its master password?
  5. When can we meet again to see what information has changed? Six months? One year? Like other “talks” we have with our family, this “money talk” is not a one-time event. Your financial and family life will change, and it is important to stay on top of these changes.

Pierson and Nancy did so many things right in their 52 years of marriage, but please don’t follow their example when it comes to communicating about family finances. Be brave, plan on watching a scary movie another day, and schedule your “money talk” today!

Bridgeworth Wealth Management is a Registered Investment Adviser.

Bridgeworth Wealth Management is not affiliated with LastPass or Dashlane. 

The following suggestion of LastPass and Dashlane should not be construed as promissory from Bridgeworth LLC as to its safety/security.  Please do your research and read site Terms of Service and Security Statements.  We live in a dangerous world and encourage clients to take digital security seriously.

Names in this blog post have been changed for privacy reasons.

Bridgeworth is now a part of Savant Wealth Management as of 11/30/2023. Savant Wealth Management (“Savant”) is an SEC registered investment adviser headquartered in Rockford, Illinois.