Women and money: Avoid big surprises
Howshocking it is to hear that today’s educated and successfulwomen are still being surprised about marital money issues— whether as a result of death, divorce, illness or betrayal.
Yet these true stories below— all of which I have encountered over the past three months — illustrate a costly deficiency when it comes to personal finances. (Names and details have been changed to protect the guilty.)
Susan is a successful careerwoman who contributed more than half the income and assets to her marriage. Their three children were in college when her husband asked for a divorce. Shewas blindsided— and also in need of a lawyer. Butwhen the attorney asked for financial documents, past tax filings, investment accounts and bank records, shewas at a loss. Itwasn’t her “territory.”
Elaine had been living with aman for 12 years. Shemoved into his condo but also contributed to themonthly assessments, aswell as paying for her own travel. Everyone assumed theywere married. When her “husband” suffered a heart attack and died suddenly at age 56, she realized she knew nothing of his finances. And she received nothing, since his will left his assets to his adult children, who were also the beneficiaries of his retirement accounts. Shewas literally “out on the street.”
Janetworked in her husband’s business, scheduling staff and handling payroll. Shewas even paid a salary. But she never thought about where the rest of themoneywent— the savings, investments and tax paymentswere made by “the boss.” Andwhen he announced hewas leaving, she realized that except for one credit card, she didn’t even havemuch of a credit history. The family housewas in his name.
Roberta learned her husband hadn’t paid the mortgage in eightmonths when she answered a call fromthe lender, talking about a foreclosure on the family home. That’s how she discovered her husband and father of her two young children had been unemployed for over a year, since before the pandemic, and had run through all their savings.
And sadly, Luanne came to realize the importance of estate planning when her husband suffered early-onset dementia. Fortunately, she sought legal advice in time to put their joint assets into a revocable living trust, allowing her to handle themoney and even sell their home as she needed money for his care. Without that power, shewould have been stuck because a home owned in joint tenancy can’t be sold without a court order if one party is incapacitated.
The price of financial ignorance can be catastrophic. So if you have been letting this topic slide, afraid to start an argument, here’s a quick checklist of what to do on your own:
■ Get your credit report— and his report— easily done since you likely have all his basic financial information. Start at www.AnnualCreditReport.com. View all open accounts and payment history. Make sure that mortgage payments are also shownon your credit report, and if not, contact the lender.
■ Read your latest tax return. If you signed it, you can demand a copy fromthe accountant or IRS. Look at the “income” fromvarious sources. If there is income or capital gains, make sure you knowabout the accounts.
■ Demand an update to your “estate plan”— and participate in the process. It’s not just about “who gets what.” You need the power to manage assets in case of death or illness as a co-trustee. Do not surrender that power to a bank or legal “trustee.” And thenmake sure you rename all assets into the revocable living trust immediately.
Look at the latest statements fromall investment and savings accounts. Get the online log-in credentials for all accounts.
Demand a meeting with a fee-only, fiduciary financial planner. You can find a link to the Wealthramp search box atTerrySavage.com. Be sure to fully participate in any meetings.
Yes, I’m advocating that everywoman— and man— get up to speed on all financial issues in a marriage or relationship. This is not about trust; it’s about that old saying: “Trust, but verify!” And that’s, for sure, a Savage Truth.