How we help you and your loved ones feel prepared, long before you ever need to
By Brad Sorenson, CFP®, MSPFP, Diversified Portfolios, Inc.
Key Takeaways:
· Do both spouses need to understand the financial plan equally? Both should understand the basics. In most couples, one person is more engaged with finances than the other, and that’s normal. What matters is that neither person is left starting from zero if something happens.
· How does Diversified Portfolios help ensure my financial plan stays up to date? We review it with you at least annually, walking through your balance sheet, insurance coverage, estate documents, trust titling, and beneficiary designations.
After three years, my fiancée, Taylor, and I are officially tying the knot next month.
You’d think three years would give us plenty of time to plan, but we’d been planning to elope up until March of this year. Thus began our mad dash for invitations, flowers, and a million other decisions.
But even with all the planning happening, the wedding has brought up several other to-dos that many couples might not think about. Is my life insurance in order? My estate plan updated? What about the financial and healthcare power of attorney designations?
These questions are about as fun as making seating charts, and so easy to put off for another day. But it’s a gift to be able to have these conversations and make these decisions now, together, while we’re healthy and happy. I want the same thing for your family, so that whatever your future holds, your loved ones are already standing on solid ground.
Here’s what that preparation looks like, and how we help you and the people you love get there together.
Why It’s Best to Plan for the Worst
Ten out of ten times, it’s better to understand what’s going on with your finances and estate before an emergency happens. You don’t think rationally in those moments (and you shouldn’t have to). Grief is not the moment to learn how your accounts are structured.
It also doesn’t have to be a death. Incapacity is the version of this that people plan for least and encounter more often than they expect. If you’re in the hospital and can’t speak for yourself, someone needs the authority to speak for you, both medically and financially. Your spouse needs to be able to pay the bills without stress, a court process, or wondering who to call.
How We Help You Prepare for the Unexpected
We help make sure you and your partner are both prepared
In almost every couple I meet with, one person is more tuned in to the finances than the other. It makes sense. Nothing else in your life together is split exactly evenly, and everyone has different strengths and weaknesses.
I met with a couple recently who illustrate this well. He was a do-it-yourselfer, managing his own portfolio and comfortable talking about individual stocks and PE ratios. But his wife wasn’t aware of how they were invested or what their investments meant. He would tell her to buy a hundred shares of a company in her 401(k), and she would go do it, but she didn’t understand why.
As retirement crept closer, he realized that there was a worry that had been nagging in the back of his mind: If something happens to me, will she be okay? That’s when he reached out to the Diversified Portfolios team.
Many couples wait for a trigger like that to start these conversations. Usually it’s retirement, an inheritance, or even hearing what a friend went through during a big life change. I’ve made it my mission to reach people before the trigger arrives, and help guide them through the process.
Related: How Couples Can Resolve Money Disagreements and Make Better Financial Decisions Together
We start with what you own
If I could pick just one baseline item for every spouse to know, I’d point to your balance sheet.
Having all your accounts (from cash assets and liabilities to insurance plans and beyond) documented in one place means you’re not wondering what else might be out there. I can’t tell you how many people forget about a 401(k) from a previous employer until we start onboarding them as a client and digging into accounts together. I’ve seen accounts like that left entirely in cash for years, unmanaged and unnoticed, because nobody remembered they existed.
Another important item for spouses to understand is how each account is titled, who is designated as beneficiary where applicable, and who has appropriate access or authority. Depending on the type of account and your estate plan, those arrangements may look different. We help clients review these details and coordinate with their legal and tax professionals when appropriate. I once had a client whose wife passed away, and several years later we learned of stocks she owned in a small account. By then the estate was closed, and recovering the shares meant going back through the courts in a four or five stage process. She almost certainly wasn’t hiding it; she had simply bought the stocks and forgotten. By putting her husband on the account or listing a beneficiary, he could’ve avoided the court hassle entirely.
Your plan evolves alongside your life and loved ones
For a lot of the families we serve, the question of what happens to their finances in an emergency involves their children. We help you work through what you want, uncover what’s best for your children, and decide when and how your kids should join the conversation.
Then we review your entire plan together in-depth at least annually. Clients come in and say, “Wait, I want to change that beneficiary designation,” or “Oh my gosh, I met with my attorney last month and totally forgot to tell you.” Aside from our regular check-ins, meeting annually and going through that review is what keeps everything current.
Taking the Heavy Lifting Off Your Shoulders
Our goal is to make the estate planning process as easy as we can for you now and for your loved ones later. That’s why we ask that you sign a form allowing us to contact your other professionals directly, like your insurance agents, estate attorney, and CPA. We want to take the coordination off your shoulders as much as we can. You shouldn’t have to be the messenger between four different offices!
And if you don’t have those professionals yet, we help you find them. I consider it one of our advantages that we don’t have in-house accountants or in-house estate planners.
Instead, we make referrals based specifically on your situation. One client might not need the same professional as another, depending on the complexity of their estate or what they’re trying to accomplish. That freedom lets us find the right fit for each family.
When Something Big Happens, You Won’t Be Starting From Scratch
One of the greatest things we get to offer is what happens after the phone rings.
Sometimes it’s hard news. Sometimes it’s an insurance claim, or a withdrawal you didn’t expect to need. Whatever it is, we get to say, “We’ve prepared for this. Go take care of your family, and we’ll help you navigate the financial pieces and coordinate with your other professionals as needed.
So here’s my standing invitation. If something changes in your life, reach out and ask whether we should revisit your plan. There’s no such thing as too small a reason.
As for me, I’ll be checking a few of these off my own list before September 26th. Taylor and I would rather handle it now, while we’re healthy and happy and looking forward to everything ahead of us. That’s the position I’d love for you and your family to be in, too.
And if we haven’t met yet, we invite you to schedule a complimentary Financial MRI meeting, where we can look at your complete picture together and make sure you both leave knowing exactly where you stand.
