In the introductory article in this two-part series, we talked about the importance of both spouses having a handle on the family’s finances. Not because one of you isn’t equipped to handle it, but because life is unpredictable. Should something unplanned take place, like death or divorce, you won’t have to pay an attorney to figure out your financial situation.
If you remember, we discussed the fact that you need to make a complete list of all your assets.. Thus far, you have all of your financial accounts, including IRAs and 401ks, and also your physical assets, like your home and cars. But what else is important for you to make note of?
Next, put your insurance policies on the list. Also, take note of where the policy is held, and whether or not the premium has been paid. You should also note who the beneficiaries are, as this could make a big difference. Forgetting to update your life insurance policy is a mistake that many newlyweds make. Unfortunately, not updating the beneficiary on your life insurance policy after marriage could have devastating results in the event of an untimely or unexpected death.
The same applies after a divorce. All of the beneficiary and address information should be updated on a life insurance policy after you get divorced. Nothing would be more frustrating to your new spouse if your life insurance policy paid out after your death – to the wrong spouse!
The repercussions of both spouses not understanding the family’s money can be disastrous!
Once you and your spouse have made up your list, we recommend that you make several copies, and keep them in a secure location. This way, they will not get lost or misplaced over time. Also, in the event of a divorce, each one of you will have a copy of your assets list that you made up together. This will make the entire process much easier.
We know this is a hard topic. But by opening the dialogue about your family’s financial assets, you pave the way for all those important topics that people should talk about, but don’t. Subjects like how each partner may want their assets managed in the event of death, or how certain assets should be divided in the case of divorce. The simple act of making an assets list and talking about what you own will help you to start work on a “disaster plan”.
The unexpected death of a partner, or a divorce that comes out of the blue, can leave people feeling like the rug has been pulled out from under their feet. Having a plan in place for your financial future in all possible eventualities can greatly reduce your stress during difficult times. In addition, decisions made when you are calm and able to think through your options, will stand you in far better stead than choices made in an emotionally charged situation.
If, however, you are in a situation where you need help sorting out your family’s assets, and you need help, we are here for you. The attorneys at the Kronzek Firm have decades of experience helping divorcing couples to sort out their assets for fair distribution, and we can help you too.