You are married. Marriage is a partnership between you and your spouse. And to be efficient, you, as partners, divide and conquer. Like most married couples, you and your spouse have probably divvied up the household duties. Often times, you divide the chores into the areas that you each enjoy, or more often, detest the least.
For example, I like cars. While I was growing up, my dad worked for General Motors and he had a new company car every three months. My wife Emily, on the other hand, cares little for cars so long as they get her and her stuff from point A to point B. So I am responsible for vehicle acquisition and maintenance. Emily loves gardening. She finds it both energizing and relaxing at the same time. Growing up, I and my brothers were responsible for lawn mowing and the yard work. My first paying job in high school was spent on my knees for hours hand weeding prize winning iris flower beds for $1.50 per hour. I hate yard work. You guessed it, Emily is responsible for the gardens and yard.
We have divvied up other household chores similarly. You and your spouse may have done the same. One handles the garbage, while the other does the sewing. One does the cooking, while the other washes the dishes. One does the painting, while the other does minor repairs. Every couple is different, depending upon your likes and dislikes and also upon your experience and training.
One household duty that is often divided between spouses is household finances and bill paying. You may enjoy bookwork or maybe just don’t mind it. Your spouse may just absolutely detest handling the finances. Or it could be that money management skills are just not one of the gifts that God had given one of you. As is often the case with many married couples, only one of you is totally responsible for all the family finances and bill paying.
However, if only one of you ever handles the family finances, you may create unintended consequences in the event of a disability or death. For example, I had one situation in which the wife hadn’t written a check in nearly 60 years of marriage, let alone balance a checkbook. The husband handled all the family finances, because that is what the man of the house did. When the husband died, the wife was lost. She had no idea how to handle the bill paying or the family finances.
In another case, the wife was a bookkeeper by trade and handled the family finances for their entire marriage. When the wife became mentally incapacitated, the husband not only had all the burdens of taking care of his sick spouse, he had to learn to handle all of the family finances and bill paying. This isn’t easy when you are younger, but it is especially difficult in your eighties.
Often times, one spouse does not even know where the checkbook, bank statements and financial records are kept, much less how to pay bills or reconcile bank accounts. I have come across another situation multiple times. The wife handled all of the family finances, including the books for the family business and the family investments, while the husband ran the family business operations. When the wife became incapacitated or died, the husband not only had to continue to keep up the business operations, he had learn to and handle all of the business and family finances. And if his wife was incapacitated, he had to care for her too. Many times, the husband doesn’t even know what investments they own, let alone have any idea how to take care of the family or business finances.
To avoid this situation, what can you do? One of the best things to do is to do what many businesses do with their employees. They cross-train their employees with the duties of other employees. If one employee becomes sick, ill, leaves or dies, then at least for the short term, current employees can step in and cover for the absent employee.
A household is no different than running a business. It is critical that both of you know where all the financial records are kept and how to pay bills. This is especially true if you have to do certain estate planning or are applying for Medicaid to finance nursing home costs. You may have to document particular financial transactions going back five years, or more.
Make a list of what you have and where things can be found. Show each other where to find the paid and unpaid bills, bank statements, investment statements, life insurance policies, etc. Also, make a contact list of all of your financial advisors, insurance agents, etc.
Sit down with each other when it is time to do the weekly or monthly bills. Each spouse should cross-train the other so that each of you knows what the other does. Cross-training is probably the best thing to do if the non-bill paying spouse is able, even if they are not willing. If something happened to the bill paying spouse, the other could just step in and continue handling the family finances without too much difficulty.
If you are the bill paying spouse, by cross-training your spouse or providing for someone to take over for you when you are unable, your spouse would not to have to worry so much about the family finances. Your spouse then can concentrate on your care if you are incapacitated or after your death, dealing with your death and grieving.
If you are the spouse that currently has nothing to do with the family finances, ask your spouse to get you involved so that if something happens to him or her, you can take care of things. Your spouse may be resistant. But if that is the case, be insistent.
In our household, Emily and I have divvied up certain bills. I pay some, she pays others. We each have our own bank account and credit cards and we each are responsible for balancing our own checkbook and paying and reconciling our credit card statements. I know where Emily keeps her financial records and Emily knows where I keep mine or knows whom to ask for them. This works well for us. If either of us is unable to handle his or her part of the family finances, the other could easily step in.
If your spouse does not have the ability to do the finances or you find yourself in this situation after your spouse’s incapacity or death, then there is something that can be done. Hire it done. There are a number of bookkeepers and accountants who provide bill paying and checkbook reconciling services to individuals for a fee. I have had a number of clients who, after the death or incapacity of the spouse who handled the finances, were unable to handle the family books or just didn’t want to do so. In such cases, they hired the family accountant or tax preparer to provide those services.
Sometimes, one of the kids will take over the family finances for the parent who has not handled them previously. Is this a situation with which you would want to burden, or trust, your children?
If you are the bill paying spouse, one of the best gifts that you can give each other is the ability to carry on after you are incapacitated or are gone. You can do this by cross-training them in the family finances or arranging for someone to handle those duties upon such an event. This goes a long way to ensuring that the family finances would continue to be protected for each other and the children.
By Matthew M. Wallace, CPA, JD
Published edited August 14, 2016 in The Times Herald newspaper, Port Huron, Michigan as: Financially train your spouse