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Are You the Financial Expert in Your Relationship? Thumbnail

Are You the Financial Expert in Your Relationship?

By David Benning, CIMA®

Even if I were not an investment advisor in my professional life, I would hold this title. While my partner and I make financial life decisions together, the day-to-day tasks associated with our finances are left up to me. To be clear, she is the expert on virtually everything else, so I have an extremely narrow scope of responsibility. That said, she is not particularly interested in the same topics I so thoroughly enjoy. This arrangement is both natural and efficient in most respects. In my work with our firm’s clients, I have noticed that we are not an outlier.  Most couples tend to assign greater responsibility for the finances to one partner, and many couples delegate that role entirely to one person. Unfortunately, there is a significant problem with this arrangement, which can result in a crisis under the wrong circumstances.

Doug and Pat met 32 years ago when they moved to the same city. As two East coast transplants living in the Midwest, they quickly became inseparable. They got married, raised a family, and had by all measures, an extremely successful life. Pat was an executive at a large bank and Doug worked in operations at a local, family-owned business. They were extremely thoughtful and diligent about planning. Like many couples, they divided responsibilities according to their personal interests. As a result, Pat handled the finances which included investment decisions, tax returns, and meeting with me, their financial advisor. I saw Doug occasionally, but his presence was uncommon, and it was clear he preferred it that way. He teased Pat and me, calling our investment conversations “nerd talk”.

Then things suddenly changed when Pat was diagnosed with cancer. It was mind numbing how quickly it progressed. Within a few months we went from talking about the diagnosis and sharing hopeful thoughts about treatment options, to updating estate plans and ultimately laying a beloved partner to rest. In three short months everything changed. Doug was thrust into a set of decisions and responsibilities completely over his head. To make matters worse, it occurred at what was arguably the worst moment in his life.

To help him get his arms around the family finances, Doug and I began to spend a great deal of time together. Understandably, he was lost. Paying bills, managing a budget, reviewing investments and insurance, and handling day-to-day decisions was foreign to him. But mostly, he was incredibly overwhelmed. Mundane financial tasks were both a challenge and a source of continued grief. Ultimately, I came to realize these new financial responsibilities were a pernicious reminder of his loss. Not only did he feel unprepared, but he also had constant, pointed reminders of all that Pat had done on their behalf. Our team did everything we could those first several years to help him. We had meetings almost monthly to ensure bills were paid, accounts were settled, taxes filed, and that he was not overcome by his grief.

During this same period, we had several other clients go through extremely similar situations. The gravity and scope of the issue hit me and my business partner. What could we have done differently to help clients avoid this outcome? As we reviewed the literature on the topic, we felt there was a gap. Much of what is published involves check lists and general organization. Although critical, these lists fail to fully address the range of issues and impacts that occur when a loved one dies. In an effort to help couples develop a more robust plan and to ensure the resilience of the surviving spouse, we developed this guide.

Doug is in a better place now. Nobody ever fully moves on from such a loss, but the finances are not as painful as they once were. I still work with him more closely than the average client because he needs the support and finances will never be his favorite subject.

If you are concerned about this dynamic in your marriage or partnership, talk to your financial advisor about it today. Or if you want to talk to us about it, you can contact us here to schedule a consultation. There is no obligation, and our conversation is private.

guide to sharing the financial plan

This is not a recommendation and is not intended to be taken as a recommendation. This material was prepared for general distribution and is not directed to a specific individual.

LPWM LLC does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisers.