End-of-life financial planning has become an important facet
of retirement planning, according to The Mather Group, a fee-only RIA wealth management
advisory firm in Oak Brook Terrace, Illinois and Houston. The goal is to ensure
that the surviving spouse is financially protected.
“We’ve found in our practice that Baby Boomers are more open to discussing and preparing for end of life issues,” says Stewart Mather, head of the firm. “But there are some people who continue to push these important decisions down the road, which can result in confusion and costly mistakes for the surviving spouse.”
The Mather Group suggests five steps people can take to ensure the financial stability of their spouse or partner. First, they should share all pertinent financial information with their partner. This includes retirement savings and other investments, cash on hand, money owed on loans and credit cards, vehicle titles, mortgages and other financial accounts. They should give their spouse their passwords and account numbers, keeping them in a fully encrypted, cloud-based safety deposit box.
An up-to-date will is also critical. This can be arranged by meeting with an estate-planning attorney to draw up a will or trust. They also need to ensure that the beneficiaries named on retirement, investment and bank accounts match their wishes in the will or trust, as those supersede the will.
They should research their Social Security benefits and let
their partner know what they are; the surviving spouse of a retired couple is
eligible to receive the larger of the two Social Security checks. However, the
Social Security Administration does not do this automatically for people; you
must complete a survivor’s benefits application.
It’s also important to have a cash reserve for the surviving partner to handle probate costs, lingering debt or taxes.
Finally, they should let their partner know what kind of funeral arrangements they would like and set aside funds to cover it. The Mather Group says that that a basic funeral costs an average of $7,000.