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Accounts and
Accounting
By Susan Law Corpany
Editor’s
note: This is the second in a series of articles designed to help
spouses pick themselves up financially after the death of a loved
one — or to prepare before the unthinkable happens. Read part
1 here.
First of all, thanks to everyone who followed
through on the last assignment. I hope to hear from all of you again,
and I hope to pick up a few new participants as well. Today’s
assignment has to do with bank accounts, bill paying and insurance
coverage. In most households one of the marriage partners has the
lion’s share of responsibility for bill paying. This can lead
to ignorance on the part of the other spouse.
1. Make a list of all bank
and investment accounts.
Somewhere safe you should have a complete list
of all bank accounts, approximate balance, account numbers and any
automatic payments that are made from these accounts. If you don’t
have this list, make it. If you are single, make sure someone in
your family is aware of your finances. You might want to consider
having a close relative as a co-signer on your account, so that
the funds could be accessed in the event of your death, especially
if you are a single parent of young children who would need to be
cared for.
You should also make a complete list of all
investment accounts and both spouses should be aware of what is
held and how and when it could be accessed. Retirement accounts
often have penalties for early withdrawal.
2. Make a list of all bills,
due dates, methods of payment and all other pertinent information.
It is a good idea to have a monthly meeting
to assess the state of your finances and brief each other on any
extraordinary expenses upcoming, or other unusual circumstances.
Using Quicken or other financial software makes having this information
at hand easy.
I take advantage of being able to pay many of
our bills online. I realize that I have not made my husband aware
of the passwords and user names for those accounts. There are many
options available to us now that were unavailable a few short years
ago. If you have decided to go paperless and do not receive a statement
in the mail for your Visa card, make sure someone has that information
in the event that something happens to you. If your automobile insurance
payment is taken automatically out of your account, make sure your
spouse is aware of that.
When I worked as a secretary to an estate planning
attorney, he would often bring in stacks of mail for me to look
through in order to determine the assets and obligations of an elderly
parent who had not left sufficient information for his or her children.
We would wait for the bank statements and investment statements
and bills to cycle through and would piece together things as best
we could. People often end up paying attorneys to do things they
could and should have done themselves.
3. Identify life insurance
coverage and evaluate the adequacy of your coverage.
Identify what life insurance you have, both
policies you have purchased and policies that are provided by employers.
Throw away policies for insurance that is no longer in force. In
my aforementioned employment, I was also often given a shoebox full
of insurance policies and told to make phone calls and find out
which policies were in force. Once you have this list, you can evaluate
if you have adequate insurance for your family’s needs. Don’t
overlook the need for insurance on your wife, even if she is not
a wage earner. You might be surprised to find out what services
she provides to your family if you are faced with having to replace
them.
Make sure the beneficiaries are correctly listed
and update them if they need to be updated. Life changes require
reevaluation. Marriages beginning or ending, births, deaths, all
can bring the need to update and evaluate.
Being organized is an ongoing challenge for
me. I am a creative right-brained person, and this is a left-brain
function that I have to work at. We recently reaped the benefit
of one of my organizational binges. I had reworked the household
accounts, color coding the files and clearly marking each file drawer
as to the contents. Driving on the other side of our island, the
transmission on the Jeep started acting up. I phoned by husband,
and he told me he thought the transmission was still under warranty
from when we had last had it repaired.
I heard the dreaded words, “Where would
I look for the paperwork on that?” I told him he could start
with the green file folders in the drawer marked for auto insurance
and repairs. I was sure it was somewhere in one of my random piles
of disorganized papers. A few minutes later he called and said that
it was there in a folder, clearly marked. That was amazing! Even
more amazing is that the transmission repair was good for twelve
months or twelve thousand miles. We were on month eleven and still
under the twelve thousand miles. He drove over with the paperwork,
met me at the repair shop, and we got things taken care of at no
cost.
It does pay to be organized.
You may think these are things you don’t
need to tend to. Go ahead; make your best excuse. I recall some
famous last words I said a few years ago. This being an election
year, I am reminded of when Thom and I were dating and my son and
I had flown to Hawaii from Florida for a visit, forgetting to pick
up absentee ballots so we could vote in the presidential election
between George Bush and Al Gore. When Thom asked me about it, I
was embarrassed to have neglected my civic duty, so I excused myself
by saying, “It isn’t like it is going to come down to
a couple of votes from Palm Beach County.”
What will your famous last words be?
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