A final 'love letter' to your spouse
By Bob Moeller
WEAC Member Benefits
February 2007
Financial
Planning Seminars
Achieving
Financial Independence
At the beginning of each year people naturally review
their investments. It is also a good time to review your estate planning.
Estate planning eventually gets down to acknowledgement
that you might die. People don’t like to think of this. It is
one of my goals in life to make my death as easy as possible for my
spouse. I kid in my seminars that she might be grieving for 10 years
and then relate to them one thing I’ve done to make my death easier
on her. I suggest you do the same thing.
I find that frequently one spouse is mostly “in
charge” of the investments and finances and while I always emphasize
the importance of both spouses being knowledgeable I realize this doesn’t
always happen. So I recommend both spouses do a final “love letter”
designed to make death easier on the surviving spouse.
Mine is on simple school paper, hand written, with cross-outs
and additions scribbled in as situations change. It is a document with
only one purpose, to help a surviving spouse if you die or become unable
to fully function. My spouse knows right where it is and we review it
each year.
Below are the kinds of things I cover in mine. Of course
I prefer that my spouse know all of the stuff below all the time, but
if she is grieving, she might be helped by this document.
- Here is the kind of funeral I want. (In my case I don’t want
my spouse and family feeling something impressive should be done;
I direct that it be cheap. I want my spouse and family to have the
money. )
- Do not rush into any big money decisions for several months.
- Here is the life insurance situation. Proceeds are tax free. Read
#2 again. Put the money in our Money Market fund for a while.
- We have concluded that you can probably trust . . .
- We have completed the important documents such as Power of Attorney
for finances, health care, etc. Here’s where they are located.
(Note to readers: blank forms are available to members, just e-mail
me.)
- Here is a basic run-down of our debts, required payments, etc.
...
- Our income tax returns are located . . .
- We have the following bank accounts and investment accounts ...
- Our investment statements etc. are located . . .
- Our basic situation with health insurance is . . .
- Important things you should know about my job benefits, etc., and
whom you can contact for help, are ...
- Here are basic financial / investing rules you should follow for
the rest of your life . . .
- If I die, you should visit the local Social Security Office to
see just what your options are.
- My retirement plan contact would be … talk to them about
what options you have. (For members this would be the WRS.) Retirement
statements are located . . .
- 16, 17, etc. Personal wishes, anything else unique to your situation.
Financial management made simple
My wife insists that I relate to her a simple uncomplicated approach
to investment / financial management should I die or become mentally
incapable. Here is what I tell her based on our personal financial situation:
- Have about half of your investments in the stock market and just
use the Vanguard or Fidelity Total Stock Market Index fund. 2.
- Have about half in CDs,Total Bond Market Index, etc.
- Have your cash invested in the Vanguard Prime money market mutual
fund, or a place paying about that rate of interest.
- Have no debts except maybe a low-cost regular mortgage.
- Never invest in any investment product (anything that builds a
cash value) from any Life Insurance company. Index Annuities are bad.
Universal Life is bad.
- Subscribe to one good magazine like Money, SmartMoney, or Kiplinger’s
Personal Finance, and be sure to read it.
- Trust no one regarding investments.
Posted February 4, 2007
