With all the activities filling busy family, social, and professional calendars, it’s easy for women to push financial matters aside or defer them to others, but, whether by choice, divorce or death of a spouse, most women will be solely responsible for managing their budget, investment and insurance programs and retirement plans at some point in their lives. And, with women spending more time out of the work force than men, raising children or caring for aging parents, every financial decision becomes even more important, especially as we age into retirement.
Knowledge is power but, more important, having access to that knowledge is critical especially with financial statements and documents so often being viewed and stored electronically these days. If your spouse or partner did not come home this evening, do you have passwords and access to bank and investment accounts, insurance policies, and retirement plans? Would you know where to locate important documents such as tax returns, wills, and trusts? And when was the last time you reviewed beneficiary designations on insurance policies and retirement accounts?
Keep in mind that named beneficiaries always supersede whatever is indicated in your will, so, if family circumstances have changed, you should ensure all beneficiaries, including those of your spouse or partner, are up to date. Horror stories abound about life insurance proceeds passing to the former wife because a beneficiary designation was never updated. Insurance is a critical component of any financial plan so review your insurance portfolio at least annually or when you have a life event such as a birth, death, marriage or divorce.
If divorce may be in your future, the time to access important financial information is long before “I Love You” becomes I.O.U. in a divorce settlement. Marriage is an economic partnership and, as a general rule, assets and liabilities acquired during the course of the marriage will be subject to property division unless they were received as gifts or inheritance and not comingled in a joint account with your spouse. But even when accounts are not jointly titled, such as Individual Retirement Accounts (IRAs) or 401(k)s, if they are funded with income earned during the marriage, will be considered marital assets as part of the property division.
When a spouse or partner is seriously or terminally ill, consulting with an estate-planning attorney may help you make important decisions to protect your assets and plan for your future financial security. Documents such as a Power of Attorney and Advanced Health Care Directive will permit you to make financial and medical decisions on behalf of your loved one in the event they are unable to do so.
Not sure what you owe? A good idea is to access your credit history periodically by visiting www.annualcreditreport.com to ensure no debt has been acquired in your name without your knowledge.
The key to enjoying financial security at every age is to spend less than you make, save for retirement, use credit wisely, and ensure against perils such as loss of life or income. n
Carol Arnott Robbins is a Certified Financial Planner, Chartered Financial Consultant, Certified Divorce Financial Analyst and an Accredited Domestic Partnership Advisor. Her financial planning practice has been featured in the New York Times and other national publications. She regularly presents seminars on a variety of financial topics of importance to women.