My husband is out of town this week. I’m reminded that I sometimes don’t appreciate him as much as I should. Like most couples, we divide and conquer the responsibilities of running a household. We often forget about all the responsibilities being managed by the other and can find ourselves a bit at a loss when they’re not around. For me, it was a major appliance that had to be quickly replaced. When appliances break, he repairs them and manages all the routine maintenance. I’m clueless in this area and trusting him to oversee such things. Luckily, he was able to walk me through the specifics of what I would need to do. 

This reminded me of the potential issues that often arise in households where one spouse exclusively manages the finances. It can be extremely challenging when the worst-case happens and a spouse doesn’t have the information needed to manage the finances. While we are always here to help clients navigate, advance planning can make things much smoother for a spouse (or a child/other family member) in a worst-case event.

Life Insurance & Estate Planning

This is a top area to focus on, especially if you have young children. Life insurance can help ensure there are funds available to take care of immediate needs and provide for ongoing expenses. A properly drafted estate plan will include all documents needed for your spouse (or other trusted person) to step in and take care of what is needed. An estate plan is more than just a will. Other documents, such as Powers of Attorney for healthcare and financial matters, are critical during an incapacity. Life changes and laws change. We recommend reviewing these documents every 3 to 5 years and make sure they still meet your wishes.

Organizing Important Papers

Gathering and organizing years of documents can be a daunting task. Start with the items that you can easily locate and add to it to create a complete file. Once it is done, review and update each year to make sure it is still complete.

Here’s a brief list of items to include:

• Keep forever
  Certain items need to be kept permanently and in original form. For example, birth certificates, death certificates and health records. These are best stored in a physical filing box or cabinet – preferably fireproof and with a lock. Estate planning, other legal and defined benefit plan documents would also go into this type of storage. In general, for any documents that would be difficult or impossible to replace, keep them indefinitely. 

• Keep for Seven Years
  Tax returns (and back-up) need to be kept for three years, although there are exceptions. To be safe, we recommend keeping tax returns seven years after the filing date. Also, you will want to keep records of real estate purchases/improvements for seven years after the property is sold for capital gains records. Also, before discarding any W-2 forms, reconcile the income to your Social Security Statement to verify earnings are reported correctly. 

• Other Items
  Receipts can be discarded once they are reconciled with the monthly statement or online banking. For household appliances, furnishings, and big-ticket items, keep the receipt with the warranty information while you own it. Account statements can be reviewed monthly and filed, although you can shred/delete the monthly statements after reconciling with the annual statement. These are generally available online with the bank or investment company and can be easily accessed if needed. Same concept applies to paystubs – discard them once they are reconciled to the year-end W-2. Keep insurance paperwork while the policies are in force. 

Storing Critical Information

Critical items (birth and marriage certificates, titles, wills, insurance policies) should be kept in a secure location. I recommend that you use a safe deposit box or a fireproof safe. Other documents can be kept in a physical filing system or kept digitally. If storing digitally, files should be password protected, kept on a removable drive, or stored in a secure cloud environment (such as the vault in the PlanFirst! software). A password vault can be a fantastic way to securely store login information in one secure location. Regardless of the storage method, make sure your trusted contact knows how to access in an emergency. 

Stay Involved and Keep Learning

Regardless of who manages the finances, we recommend both spouses attend meetings and keep learning about their overall financial picture. Personally, my husband and I sit down at the beginning of each year and review everything together. We assess where we are on long-term goals and what changes we need to (or want to) make for the next year. While I oversee day to day expenses, he knows our big picture and what we are working towards together. 

Our firm works to make sure that you have access to your important documents through the PlanFirst! vault. If you are interested in tackling this project, let us know and we can provide more resources to help you make it happen.

As always, we are here for you. Please email or call if you want to set up a meeting or talk by phone.

Mary McCraw, CFP®

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