How to Get Your Financial Affairs in Order and Protect Your Family When You Are Gone

How to Get Your Financial Affairs in Order and Protect Your Family

Last week’s events reminded me how fragile life can be and how quickly it can turn topsy turvy when a loved one dies. As Benjamin Franklin so accurately noted, “In this world nothing can be said to be certain, except death and taxes.” And I can say from both a personal and professional perspective, death still flattens us, whether it comes as a shock or not.

Too often I receive phone calls from someone who has recently lost a spouse or parent and desperately needs help figuring out their finances. The problem? The surviving family member is clueless about the financial situation and bills need to be paid. They want the space to grieve for their loved one, but now they are panicking because they don’t know what to do. It’s a scary place to be in and one that is avoidable with a little planning.

7 Steps to Put Your Finances In Order

I’ve always been an advocate of financial transparency in a marriage, which includes being prepared for when one of you dies. Note that I didn’t say a premature death either. As Mr. Franklin stated, death is a certainty, and it’s a courtesy to make sure the surviving spouse or your children know exactly who to call and where to go for help.

Step 1: Review All Financial Accounts

Go through every single financial account you share jointly and individually. Where it makes sense, you may also want to consider consolidating and merging some accounts to simplify matters. I also suggest creating one list with all the relevant information. Store this in a secure place where both of you have access (see step 4).

If you do not have life insurance, this is the time to figure out how much you need and get some quotes. Learn more on how life insurance creates a strong financial foundation for you and your family.

Review and Update Beneficiaries

As you review your financial accounts, make sure your beneficiaries are updated and correct. Many times people forget who they put as their beneficiary, especially if an account is old or created prior to your marriage. You don’t want your money to go to the wrong person. Please note: beneficiary designations override wills. So be sure they are accurate.

Step 2: Review Debt

Now it’s time to review your debt. It surprises me how often one spouse is in the dark about the family debt. Go through any outstanding debt you have from mortgage, student loans, car payments and credit cards. Death does not mean debt is necessarily forgiven and it can be complicated to sort through. Being clear on what debt you have (jointly and individually) will make it easier for your survivors to notify lenders as they figure out which debts need to paid with your estate.

Bonus Tip: If one spouse owns a separate business, this is a good time to go through the business books and create a contingency plan. Your clients and employees depend on you and deserve to be taken care of too.

Step 3: Review Bills

Generally speaking, one person may handle paying the bills. Hopefully the other spouse isn’t oblivious to the bills, but they probably could use a refresher course at to what the monthly/yearly bills are. Again, you might want to consider a list with all the various bills and due dates. Update this yearly and store in a secure place.

Step 4: Review Important Documents

Throughout the years, you collect a ton of documents. Some that need to be kept forever and others that don’t. They tend to get scattered all over the place, so now is a good time to get organized. File documents you need to keep and shred those you don’t. Be sure to do this together, so you both know where the important papers, such as birth and marriage certificates, social security cards, vehicle titles, mortgage paperwork, etc. are kept.

Create a Master Contact List

It’s easy to get overwhelmed after the loss of a loved one, which is why I recommend creating one master list of the people and organizations who need to be notified now. The list should include a contact person, phone number and account number, if applicable, for the following:

Your list may include additional people, but this is a good start. Review the list yearly to add and update contact information as needed.

Store Important Documents Securely

I recommend keeping important and valuable documents in a fire proof safe or filing cabinet with a lock. Make sure both of you know the combination and how everything is filed. You may also want to consider keeping a duplicate copy in safety deposit box at your bank.

Step 5: Create/Update Your Will

If you don’t already have a will, now is the time to create one. Your will should clearly reflect your wishes regarding the following:

Be sure to review it yearly and make changes as needed.

Parents with Minor Children Need to Have a Will

Last Wills and Testaments seem so final and young parents often believe they are something their parents need, not themselves. While your parents should have one, so should you. You want to be the one to choose who will care for your kids if you and your spouse are no longer able to do so, rather than have the government decide for you. Identify your guardians and confirm with them first that they are willing to take step in your absence. While they will hopefully never need to do so, you want to be sure they are prepared to become full-time parents to your children if necessary.

Step 6: Designate a Durable Financial Power of Attorney

A financial power of attorney is someone who has the authority to handle financial transactions if you become incapacitated. This highly trusted individual that you select has authority over your finances, although you determine how broad their powers are. Some tasks they may handle for you include, but are not limited to, the following:

It’s easy to set-up a durable financial power of attorney but there are, as always, lots of little nuances to consider, especially when it comes to selecting the right person to entrust with this important responsibility. You can find more information on durable financial power of attorney, here.

Step 7: Create/Update Your Living Will

We all heard stories about family members bitterly fighting over the medical care of an incapacitated loved one. To avoid this, you need to create an advanced-care directive or living will where you outline the medical care you would and would not want to be used to keep you alive. This relieves your loved ones from making tough decisions on your behalf and reduces arguments over your end-of-life care.

Select someone you trust explicably to be your medical power of attorney and make medical decisions around your treatment when you are no longer able to do so due to illness or injury. Please note this is separate from a Power of Attorney. You could choose the same person to be both, but it still requires separate paperwork. You can find more information on living wills, here.

Peace of Mind

We don’t know when our time on this earth will end, but we do that it will end eventually. Getting your affairs in order now will make things easier during an emotionally tough time for your loved ones. I strongly encourage you to give them that gift and yourself the peace of mind that your family will be okay.

I also know that it’s easy (or relatively so) to put our own affairs in order, but there is another generation to consider. For once I’m not speaking about your children, but your parents. On Wednesday, I’m share some tips on how to help your parents puts their affairs in order.


The Heavy Purse Store is now open! My new downloadable Money Club Workbooks are now on sale. Each workbook provides five targeted lessons to help you raise Financially Confident Kids. Please check them out in The Heavy Purse Store.

Photo courtesy via Markus Grossalber via flickr.

August 18, 2014  •  37 Comments  •  Finance

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  1. Monday, August 18th, 2014
    Shannon, this is a good advice but I would mind this when I am in my 40s and 50s, ideally. I am thinking how much it would cost to prepare all of these?
    • Shannon Ryan
      Monday, August 18th, 2014
      I think many people think their 40s and 50s is a good time to do this planning, but if you have kids, I would strongly encourage you to create a will and designate a guardian now. If your situation is quite complicated, then I would consider working with an estate attorney, which is certainly more expensive but worth the investment to make sure everything is set up properly. Otherwise if your situation is simple, you can do it a lot of it yourself online (for example Legal Zoom) for less than $200.
  2. Monday, August 18th, 2014
    Working in the funeral industry meant seeing all kinds of people stuck in this position. I couldn't believe how many people had no clue what was going on with their money, or even whether they had life insurance or not. It is very scary.
    • Shannon Ryan
      Monday, August 18th, 2014
      I can only imagine the things you and Greg saw/see. It's so sad because a tough time is exacerbated by their lack of knowledge around finances. It may not be the most fun you've ever had, but taking a few hours to get things organized and everyone one same page is worth it.
  3. Monday, August 18th, 2014
    Love the idea of creating a master contact list. Seems so simple, but I don't think most people think of it, and it would certainly save loved ones a lot of time, confusion, and energy.
    • Shannon Ryan
      Monday, August 18th, 2014
      Thanks, Stefanie! It's a huge gift during a tough, emotional time. Until you've gone through it yourself, people don't realize how many people they need to notify and everything else you have to do when all you want to do is grief. Anything you can do now to make that time a bit easier is a good thing.
  4. Monday, August 18th, 2014
    On the way into work today, I listened to Suze Orman, and she was helping out a widow in her forties who had never handled the finances before. Suze made an excellent point that stuck with me: when you're going through an emotional tragedy, it is not the time to learn about your finances. I think this is an excellent post that ties in what Suze was saying. Get a handle on your finances now, for yourself and your spouse (or anyone else in your family), so everything is in order and you don't have to worry about finances during such a hard time. Great post, Shannon!
    • Shannon Ryan
      Monday, August 18th, 2014
      Exactly, Natalie! That is not the time to learn about finances and it's shocking how many people fall into that camp. Do it now and make a tough time a little bit easier for your loved ones.
  5. Monday, August 18th, 2014
    All too many people are caught off guard when something dire happens because they aren't prepared. Our posts today run along a similar theme! Some of the options may be a little expensive such as preparing a will/financial power of attorney but without them the stress experienced during dire times is magnified tenfold.
    • Shannon Ryan
      Monday, August 18th, 2014
      Yes, too many people don't prepare for the unexpected and the irony (I guess) is that we all know at some point, death will happen. Many people assume it will be costly to set this up, but there are low-cost online options that work fine when you situation is simple. And as you said the cost is quite minimal when you compare to the amount of stress (and frankly cost too) not having these items causes.
  6. Monday, August 18th, 2014
    I could not agree more Shannon! Having worked both in life insurance and the brokerage industries, I saw similar things all too often. A spouse would pass and the other would be clueless as to what was going on or what to do. It was a great motivator not to live that way and pushed my wife to do many, though I think all of these things. We each have our own individual role with them, but by no means to the extent that the other is in the dark about them.
    • Shannon Ryan
      Monday, August 18th, 2014
      I'm sure you saw this regularly, John and it's so sad because it's completely avoidable. It just takes a little bit of time and you don't have to break the bank to set them up. Like you, it was definitely a great motivator for Chris and I too. We each have our roles too but neither of us is in the dark regarding our finances or our final wishes.
  7. Monday, August 18th, 2014
    Good article. My husband died when my children were 5 and 3 - it was, as you would expect, a shocking and grim time. I was fortunate that our finances were in very good shape and his will was up-to-date. I was also financially "literate" myself even though my husband had handled most of our finances. I still needed a huge amount of support from family, friends and employer to get through.

    Today I am shocked at the number of couples I know with small children that either haven't made a will or haven't specified guardians for their children. I know it can be a really hard decision - your parents are too frail, his live in a different country, your sister already has three children, his brother doesn't seem to want kids etc etc. Sorry but that means it is more important, not less, that you should make a decision! If the worst happens, your children need the comfort of knowing that their parents wanted then to live with A&B.
    • Shannon Ryan
      Monday, August 18th, 2014
      I'm so sorry for your loss, Sara and can only imagine what an incredibly difficult time that was for you and your children. I'm glad that your husband had a current will and that you weren't in the dark about the family finances, so an already tough time wasn't made even more difficult. I am often shocked by how many parents don't have will or designated a guardian for their kids. That's an absolute must to me. I want to be control of who raises my children.
  8. Monday, August 18th, 2014
    This is an awesome list Shannon!! It is amazing how many couples I meet with who have no real plan of attack should something happen. Many don't even know where their spouse has accounts outside of a bank account, and then there are clients who haven't updated wills since other children were born. No one wants to think about their own mortality, but I have a number of clients who are widows who wished that they had more knowledge before their spouse passed rather than trying to figure it out after while also managing their grief.
    • Shannon Ryan
      Monday, August 18th, 2014
      It's always a bit eye-opening when you see how many couples really don't know their whole financial picture. And I agree, so many put it off because they don't want to think about their mortality, but it's so much better to have the conversations now and set things up, then trying to figure out later under pressure and grieving. That is a recipe for making poor decisions.
  9. Monday, August 18th, 2014
    These are all very important. We just don't know when will be our last day here on earth and we really shouldn't leave our families with problems.

    I hate to tell you this but you misquoted Benjamin Franklin, I believe he said, "In this world nothing can be said to be certain, except death, taxes, and Candy Crush invites." You missed the last part. :-)
    • Shannon Ryan
      Monday, August 18th, 2014
      I agree, Aldo. We know our time will end at some point, so let's make it as easy as possible for our loved ones. LOL! You're right - I did forget Candy Crush invites! What was I (or Benjamin Franklin) thinking? :)
  10. Monday, August 18th, 2014
    LOL @ Aldo too funny!

    I think we are okay on all points (I mean we could always be better but we can't be perfect) except for my husband's business. I know nothing about how he handles things there. Thanks for the tip!

    For our bill payments they are all centralized through our bank or on our credit card. I've been bugging my daughter to do their will now that they have a child, my sweet Monkey Butt!
    • Shannon Ryan
      Monday, August 18th, 2014
      Aldo is funny. :) Ah yes, it's easy to stay outside of business affairs but hopefully he has some contingency plan created in the event of his death and you should it know what his intentions are. And yes, definitely get your daughter set up right and Monkey Butt (adorable) taken care of!
  11. Monday, August 18th, 2014
    Really great info Shannon. I know a lot of times it's easy to avoid those topics because it seems morbid, but not taking care of them and something happening and leaving a burden to your loved ones is a nightmare. And you never know…I just heard about the owner (who was 44 I think) of 4 daughters in manhattan beach who just passed away of a massive heart attack. He had a wife and four young girls.
    • Shannon Ryan
      Monday, August 18th, 2014
      You don't know. We always think we have so much time, and sometimes we don't. So sad to hear about the 4 Daughter's owner. My heart goes out to his family. You just don't know and being prepared is never wrong.
  12. Monday, August 18th, 2014
    I went back a second time and skimmed the post - why no mention of life insurance? I think everything you mentioned is important, but I think making sure your significant other and children (if you have them) are financially secure should be the very first thing you do to make sure that you are prepared for a devastating scenario like death.
    • Shannon Ryan
      Monday, August 18th, 2014
      Great catch, DC. I forgot to put a link to my other posts on life insurance as I wanted to focus on areas that I had not already discussed and are too often overlooked, even by those who have life insurance. But you are absolutely correct, making sure your family is protected through proper life insurance is step 1. And link now added. :)
  13. Monday, August 18th, 2014
    What excellent advice, and so well presented. Thank you for taking the time to put this information together.
    • Shannon Ryan
      Monday, August 18th, 2014
      You're welcome, Brad! I'm glad you found it helpful.
  14. Monday, August 18th, 2014
    This is a wonderful guide. I think it's much easier to do difficult tasks if you have a written master plan to follow. I will keep this bookmarked for future reference. We really need to get our parents on board as well.
    • Shannon Ryan
      Monday, August 18th, 2014
      Thanks, Kim. And I agree having a guide or list makes it easier to do hard tasks. Getting our parents on board with these is a conversations more of us need to have too. I'll be talking more about that on Wednesday.
  15. Monday, August 18th, 2014
    Ugh. This is something we keep putting off. I know our passing is inevitable but I'm scared if I do it boom, I'm gone. Not that it would be a bad thing, I just have stuff I still need to do. :).

    Thanks for putting this post together. It will be a great guide for me when I do start planning.

    I hope you had a great day Shannon! See you in the socialverse hun!
    • Shannon Ryan
      Wednesday, August 20th, 2014
      I hear you, my friend. Facing our own mortality isn't easy to do, but something we need to do. If it makes you feel better, it will feel great once you get everything done and now just need to update periodically. :)
  16. Tuesday, August 19th, 2014
    We've been through this once so far with the death of Kim's father about 10 years ago. His personal life was very disorganized but he did manage to put together a will and other specific instructions about what to do upon the event of his death. That act made dealing with the aftermath of his death much less stressful. We knew exactly what had to be done...and that was good because it's hard to have clarity when you are grieving.
    • Shannon Ryan
      Wednesday, August 20th, 2014
      It is incredibly hard to have clarity when you are grieving. You decisions end up being all emotional, and we know emotional decisions aren't always our best decisions. :) I'm glad that during a tough time that Kim's father had left instructions and a will. It's never easy dealing with the loss of a parent, but those things do really make difference.
  17. Tuesday, August 19th, 2014
    No one ever likes to think of these sort of things but the list that you have complied here is nothing short of wonderful when it comes to planning. I will be sure to refer to this list for help. Thank you for creating such a detailed yet easy to understand guide!
    • Shannon Ryan
      Wednesday, August 20th, 2014
      You're very welcome, Stephanie! I'm so glad you found the guide helpful. No one does like thinking about these things but it does make a difficult time much easier.
  18. Tuesday, August 19th, 2014
    Thank you for the helpful tips, Shannon! These points weren't something I thought much about a couple of years ago, but it's definitely on the forefront these days. The contact list especially is a great idea (well in addition to the will, but it isn't one I would think of right away), so thank you!
    • Shannon Ryan
      Wednesday, August 20th, 2014
      I imagine with the little "Flash" on the way, you are definitely thinking more about these kinds of things. :) A contact list can be a huge help during a very trying time. It's just nice not to have to hunt down that information and have it one convenient place.
  19. Thursday, August 21st, 2014
    Some excellent points in here Shannon. My wife and I don't have an official will currently, just two pages listing our accounts and desires for those when we pass (most already have contingent beneficiaries assigned). We don't have kids yet, when we do my Uncle said he would setup a basic trust for us, so that is cool. We have also made a spreadsheet of accounts and logins so there should be access to everything if something were to happen.
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    "As a Certified Financial Planner, it is my passion to help individuals and families build a healthy relationship with money. I look forward to helping you raise financially confident kids.” - Shannon Ryan