When homeowners think spring, they think spring cleaning. I’ve got a suggestion for folks who are looking for a winter equivalent—clean up your finances!
By cleaning up, I’m not talking about getting out of debt or anything like that. I’m talking about organizing your finances so that, in the event of an unexpected accident or worse, your spouse, partner, or will administrator, will not be searching for multiple needles in multiple haystacks.
The inspiration for this thought came from an article I read in AARP. It discusses the many challenges a woman who was unexpectedly widowed faced in tracking down basic financial information to help settle her husband’s estate. If you are in a marriage or relationship where one person handles most or all of the bill-paying and portfolio-managing, you will want to pay attention.
First off, this is not to suggest you change your current financial management arrangement. But like anything else, you need to have a contingency plan should the person who handles the money be incapacitated or worse.
Passwords
If the money person in your household does anything online, you need to have a way to share access to their passwords. This should include user names and passwords for bank accounts, credit cards, mortgage payments, etc. If that sounds like a lot to keep track of, it is. That’s why I would recommend utilizing a password saving service like LastPass or something similar.
With LastPass, you can create a secure account where you can store all your passwords. As you log onto sites—e.g. your bank account—LastPass will ask if you want to store the login info. You can then store it within LastPass (it even enables you to create folders to make it easier to find things). LastPass and other apps like it essentially require you to know only one user name and one password and they store the rest.
LastPass is a free service but also has a premium product membership that enables you to share an account with one other user ($24/year) per or up to six ($48/year).
A list of accounts
You will also want to create an inventory list of all accounts each of you have in one document–a Word document or Excel spreadsheet are fine. Credit cards, bank accounts, insurance, etc should be listed. It can also include social security numbers—you’d be surprised how few spouses know their s.o.’s numbers or their children. Also include the wifi password, even if you think you remember it. Store that document in the cloud using a free service like Google Drive or Microsoft’s OneDrive. Share that folder electronically with your spouse or the executor of your estate.
Social media, email and other things
E-mail addresses and passwords are some more things you should share with your spouse or partner. It can be included in the document we just talked about. When somebody passes on, unexpected or not, the e-mails will keep coming. You will want the ability to reply to e-mails if need be or to close the entire account down.
Similarly, your s.o.’s social media accounts will go on if they do not. Facebook does let you name an administrator should you unexpectedly pass away. Others may or may not. A list of all your social media accounts would also be a good thing to include in the document we spoke of above. You won’t need to know your partner’s user name or password. You can notify most social media sites of someone’s passing with some form of notification (e.g. a link to an obituary will suffice for LinkedIn) and they will take down the account.
Other items
You may include this in the master list of accounts or create a separate list of you and your spouse’s doctors, with contact information. There will be a number of painful calls and letters in the months after someone’s passing. By having a list of your s.o.’s doctors and other professionals, you can proactively alert them.
Again, it would also be helpful to keep a file listing all insurances or let your spouse know where the hard copy information is for all your insurance, mortgage and other pertinent financial information. If you don’t have one, it might be time to invest in a firebox with a lock to store this critical kind of information. Each of you should have a key.
Sorry to start the year with a rather bleak topic. Yet by addressing this now you will be bringing order to your financial affairs for the rest of the year and beyond. That can bring a peace of mind you just can’t quantify.
To read the entire AARP article, click here.