Financial Communication for Couples

by Craig Moser on March 8, 2019

We’ve all heard good communication is the foundation or a strong marriage.  However, have you considered the importance of financial communication in your home?  Do you know how this can impact your marriage?  For example, a 2019 Fidelity Investments survey found that more than 4 in 10 couples disagree on what age to retire.  In addition, half of those same couples disagree about how much to save for retirement.

To help you and your spouse get on the same page, here are four easy tips to steer your financial communication in the right direction.

Make a list of all your financial accounts.

In many situations, both spouses have a checking and savings account before the marriage.  They may also have individual credit cards and investment accounts.  Create a spreadsheet with account numbers, passwords and/or PINs for  a great way to keep track of them.  Making an of inventory helps organize your finances.  It also sets lays the foundation for your investment decisions while opening the door to financial communication.

Name account beneficiaries.

Naming a beneficiary for financial accounts and insurance policies is just as important as creating an estate plan.    Named beneficiaries on these accounts generally supersede instructions in your estate plan.  This means assets in these accounts pass directly to the named beneficiary upon your death.  It’s one way to help avoid legal complications in the event of a death.

Retirement accounts.

You can name beneficiaries for your retirement accounts.  This includes your 401k and/or IRA.  Some employer-sponsored plans automatically designate your spouse as beneficiary.  To change this, your spouse must agree in writing.  Check you company’s plan description to learn more.

Non-retirement accounts.

Naming a beneficiary on non-retirement bank and/or brokerage accounts may establish a “transfer-on-death” designation.  Known as a TOD, this allows ownership of the account to be transferred to your named beneficiary.

Insurance policies.

Life insurance policies probably aren’t something you think about very often.  However, it’s a good idea to keep your beneficiary designation updated.  For example, forgetting to change the beneficiary designation after a big life event could result in An Accidental Beneficiary.

Prepare for unexpected situations.

Whether you’re 21 or 81, you should prepare for the unexpected.  To improve your financial communication, each spouse should have these three documents and discuss their wishes:

A will and/or living trust and/or pour-over will combination.

Your will is a legal document that details how your property is to be distributed, and how any minor children will be cared for when you die.  A pour-over will is often established in conjunction with a trust.  Upon death, all or a portion of assets are transferred, or “poured over” into a trust.  This ensures the estate has explicit directions on moving assets into a trust.  In addition, a pour-over may alleviate the probate process.

Power of attorney.

You should appoint someone to act on your behalf while you are alive.  There are two types you should consider:

  • Durable power attorney takes effect immediately.
  • Springing power of attorney takes effect if you become incapacitated and are unable to handle matters on your own.

Health care proxy.

This document names someone to make health care decisions for you if you aren’t able to communicate or don’t have the capacity to make your own decisions.

In addition to these primary documents, you may want to consider an advance medical directive.  Known as a living will, this outlines your wishes about life-prolonging medical treatments.  It becomes effective only as described in the document itself.

Gather important legal documents.

Both spouses should know where to find the last 2 years of tax returns, marriage and birth certificates, insurance policies, wills, estate documents, health care proxies, etc.  It might be a good idea to designate a specific place for them.  You should also select a fireproof place that someone close to you could access in an emergency.

Financial Communication for Couples

While there are many other financial issues for spouses to discuss, these four are essential.  After the initial talk, you may want to review your accounts together at least once a year.




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