Losing a spouse brings a flood of emotions that can make tasks like managing financial obligations seem almost impossible. A little planning and organization on your part now will give your spouse a solid starting point for taking over the finances when the time comes. Getting your affairs in order long before they need to be could help protect your family and provide peace of mind.

Step 1: Gather Important Documents and Contact Information 

Reduce some of the headache for your loved ones right off the bat. Create a comprehensive master list of all of your accounts and assets, the name of the institution or bank where they are held and the approximate balance. Include login information and update the list once a year to keep the information accurate. Then, make sure you keep the list somewhere secure, like a safe deposit box or fire-proof safe.

Once that's done, move on to collecting all of your important files and documents (like property deeds, vehicle titles, official certificates and investment account paperwork) and place them in a safe place now to make it easier for your loved ones later. Similar to your list of accounts and assets, double check your documents each year to see if there's anything new to add.

Be sure to include contact information for anyone that manages your assets, such as insurance brokers, attorneys or financial advisors. With each contact, provide a description of what assets or legal documents they work with so your spouse knows who to call with questions. Additionally, including notes for each account, like required minimum balances, can help ensure your spouse isn't surprised by additional fees.

Finally, be sure to tell a family member or trusted friend where you put all of your important papers. That doesn't mean you have to fill them in on all of your personal affairs, but they should know where to find this information when it's needed.

Step 2: Update Beneficiary Information

Many people don't realize that if there is a conflict between your will and your beneficiary designation about who the proceeds of an account or policy are supposed to go to, the beneficiary designation wins. For example, if you will all of your money and property to your children, but have an account naming your sister the beneficiary, she will receive what's in that account and your children will get everything else. That's why assigning beneficiaries isn't a "set it and forget it" type of event. You should regularly be verifying that beneficiaries are updated as changes occur in your family life: marriages, divorce, new children, etc.

Keep in mind that on top of life insurance and retirement accounts, you might have further considerations to think about. For example, if you receive a pension from your employer, it may include a survivorship clause to determine if a surviving spouse will continue to receive payments. If that's the case, it's important to go over your benefits and how they'll be allocated to ensure your spouse knows what kind of income they can expect after you pass away.

You also don't want your spouse or other beneficiaries to deal with the headache of probate any more than necessary. It can be a costly and time-consuming process. Yet many accounts—such as bank savings, CD account and sometimes individual brokerage accounts—are unnecessarily probated. Though laws governing estate planning vary by state, if you have any of these accounts, they can be set up or amended with a transfer on death (TOD) to avoid the probate process. Contact your custodian or bank to set up TOD on your accounts. Once you do, update your master list of accounts and assets discussed above and make a note of which accounts have a TOD order or a beneficiary. This small step will help smooth the process for your loved ones.

Step 3: Draft (or Update) Your Will

This step is two-fold: it's a good idea to create both a living will and a last will and testament. Making these decisions ahead of time can be daunting, but it will be a relief that your spouse will have something to fall back on in case of an unfortunate event.

A living will is a legal document which names someone to communicate with medical personnel regarding your treatment in case something happens and you become incapacitated or are otherwise unable to express your preferences yourself. Similarly, you should think about putting in place a trusted power of attorney hand-in-hand with your living will. This person will be in charge of making financial decisions for you in the event you're no longer able to do it yourself.

Once you have a living will, you'll also want to create a last will and testament (and check it regularly to make sure it stays up to date). You'll need to name an executor to carry our your wishes. Contrary to what many people may think, a basic will is a fairly inexpensive estate planning document and is essential to making sure your assets are distributed according to your wishes and to prevent hard feelings and added stress during a difficult time.

Step 4: Factor in Life Insurance

Whether you have employer-sponsored or independent life insurance, make sure it's included on your master list of accounts. You should also ensure your spouse is aware of how much the insurance covers and how you intend it to be used (covering final expenses, a replacement income, children’s college tuition, paying down debts, etc.). Make it clear if there are any provisions attached to your life insurance policy, such as pre-paying funeral expenses or any paperwork that your spouse will need to file in order to make a claim on your policy.

Organizations that you belong to may also have accidental life insurance benefits for members. Keep a list of organizations that you belong to like the AARP, American Legion, a veteran’s association or professional associations, as well as the benefits available to members—your beneficiaries could be eligible.

Procrastination is the biggest enemy of estate planning. Following these steps to get your affairs in order ahead of time can help reduce the complications and stress in a time of grief for your spouse and loved ones. Ask your financial advisor what additional steps you should take based on your unique financial situation.

You can also download our free Financial and Personal Account Inventory to start creating a comprehensive master list of all of your accounts and assets.


The opinions voiced in this article are for general information only and are not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation.

Pat Wolfe

Pat Wolfe

Senior Vice President, Financial Advisor

JD, Series 7 & 63 Securities Registrations,1 Series 65 Advisory Registration,† Insurance License Pat brings 25 years of experience in the securities industry to his clients on a daily basis. Before coming to Wealth Enhancement Group, he worked as the chief executive officer of a mutual fund company, and he owned and operated a Registered Investment Advisory firm. Pat provides customized financial planning services for his clients combined with a values-driven and...Read More