Don’t Get Locked Out at the Worst of Times

By
E.J. Smith - Your Survival Guy
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By Brian @ Adobe Stock

The worst possible time in your life could be the death of your spouse. A surprise loss with no time to prepare can wreak havoc on the surviving spouse, leaving them in debt, locked out of accounts, and attempting to rebuild financially from the ground up. It’s important to do estate planning, budgeting, and even borrowing together in order to smooth transitions. One area that can really cause a lot of unnecessary harm is allowing assets to go through probate, rather than setting them up to move seamlessly from one spouse to another upon death. The Wall Street Journal’s Veronica Dagher explains:

Assets owned solely by the deceased must go through probate—the court process of validating a will—before they can be transferred to a surviving spouse. In some counties, this can take more than a year, leaving the spouse locked out of necessary funds.

Avi Kestenbaum, an estate planning lawyer in Mineola, N.Y., has seen surviving spouses forced to borrow money from their children for daily expenses in such situations, despite having a large estate.

To avoid these delays, Kestenbaum recommends:

  • Revocable trusts: Assets in these don’t go through probate.
  • Joint ownership: Property or accounts held jointly transfer automatically to the survivor.
  • TOD/POD designations: Adding “Transfer on Death” or “Payable on Death” to bank and brokerage accounts allows for an immediate transfer.
  • Individual liquidity: Each spouse should maintain enough money in his or her own separate account to cover several months of expenses.

Action Line: Another problem survivors run into is less complicated than probate law, but could be nearly as frustrating. Passwords. Share the usernames and passwords of financial accounts and keep a secure record of them somewhere both spouses can access. The last thing anyone wants to worry about in their time of grief is doing password resets or setting up login profiles. Don’t get locked out at the worst of times. When you want to talk about the future of your investments and planning ahead, email me at ejsmith@yoursurvivalguy.com. And click here to subscribe to my free monthly Survive & Thrive letter.

Originally posted on Your Survival Guy.