Hi Tammy, I enjoy actively managing our finances, but my wife does not share my interest and is concerned about something happening to me. What should we consider? Kevin, Davidson
Thank you for reaching out Kevin, this is a very common scenario. Planning for the transition when one partner becomes unwell or passes away is a key part of any financial plan.
Make sure your estate planning documents are up to date. An enduring power of attorney nominates someone to look after your finances if you are incapacitated, without this your partner cannot manage accounts in your name. Your will outlines how your estate is distributed after your death, but not all assets are covered by your will. Ensure any non-estate assets, such as Super, will be distributed according to your wishes.
Keep thorough, up-to-date records. Have a folder that contains all the information your partner may need. A balance sheet listing your assets, liabilities, investments and insurance. A cash flow table listing income and expenses. Which earnings are reinvested? Which bills are paid by direct debit? Include copies of recent statements showing account name, number and provider details. Regularly go through this folder with your partner. Do they find it easy to navigate and understand?
Consider what you could change to alleviate your partner’s concerns. Could simplifying your finances make it easier for them to manage? Does your partner have support available from a trusted family member, professional or a combination of both?
When one partner has the skill and desire to manage the finances but the other does not, it is important to balance these differing needs and capabilities. I recently met a client who needed support navigating her partner’s move into aged care. She was unfamiliar with their finances, needed to make quick decisions about funding his care and did not know where to find help. It was only by lucky accident she read one of my articles.
To cater for differing partners, or to simply prepare for the future, I have clients who manage part of their portfolio themselves and have part managed by me. They enjoy their investment hobby, benefit from financial advice and have trusted support available when needed. Some clients capably manage their retirement finances but want to reduce the time they spend on them or want adviser support for their partner as they age. Other clients have their children attend our meetings as they will support them as they age, with the oversight of their adviser.
Quick Tips: A well-structured estate plan is flexible. Joint bank accounts can be frozen, credit cards cancelled and probate takes months, so make sure each partner has access to sufficient cash in an individual account. Keep a capital gains tax cost base ledger for each asset, for inherited assets include the cost base of the original owner and their date of death.
Feel free to call me on 8376 0350 if you have any further questions or need assistance.
Regards, Tammy
Financial planner Tammy Marshman of Up Wealth Management is an Authorised Representative of Consultum Financial Advisers Pty Ltd, AFSL 230323. Phone 8376 0350 or visit upwealthmanagement.com.au
This is general information only, as in preparing it we did not take into account your personal objectives, financial situation or needs. Before acting on this information, you should consider whether it is appropriate for your personal circumstances. Although the information is considered reliable, we do not guarantee that it is accurate or complete and you should not rely upon it. Please seek financial advice specific to your situation before making any financial, investment or insurance decision.