Caregiver to sudden CFO: The roles of women in wealth transfer

Author: Kristin McKenna

Source: Forbes

Women often find themselves in a unique position when it comes to wealth transfer. Whether it's helping to manage the finances of aging parents or becoming the sole family Chief Financial Officer (CFO) after the passing of a spouse, women play a large role in managing the family finances.

The reality is that many women will outlive their male partners, and they also stand to inherit significant assets from their parents. This makes getting informed and planning for the next phase of life essential, both for peace of mind and ensuring the financial security of the family.

The caretaker role

The responsibility of caretaking, whether for a spouse or a parent, often lands on women. This can happen gradually or abruptly, and it often comes with a sudden need to take on all of the financial responsibilities. This includes paying bills, navigating insurance, needing cash and liquidity and so on, all while juggling existing responsibilities at home and work.

Having the right documents in place, such as a financial power of attorney, can prevent lapses in care and help ensure financial continuity. Importantly, these documents can also spare caregivers from the added financial and emotional stress of starting from scratch in an emergency, especially if the medical wishes of loved ones are not already known.

Getting organized: A proactive approach

There are two certainties in life, and we all know what they are. The key to navigating these transitions smoothly is preparation. One way to get started is to create an "In Case of Emergency" document or folder and review it annually. This document should cover two main areas: basic estate planning or inheritance planning and financial organization.

If you’re a caregiver for parents, adult children or other relatives consider keeping separate checklists for your own household and others where you might be called on to step in.

Basic estate planning checklist

Ensuring you know where key estate planning documents are ahead of time can help you reduce stress when the time comes. Here are the main types of information you’ll want to know:

• Legal documents: The attorney and location of the original documents (wills, trusts, powers of attorney).
• Key roles: The executor and person(s) who hold medical and financial powers of attorney. If there is a trust, find out the current and successor trustees.
• Accessibility: Documents related to ensuring the estate plan is accessible to loved ones with disabilities.
• Beneficiaries: Confirm that beneficiaries are listed and current. 

Basic financial organization checklist

You and your spouse may have a financial advisor, accountant and lawyers. Do you have all of the information you’ve gathered from the parties over the years in one place? This checklist can help you get organized, so you don’t have to scramble when you need information.

• Professional advisors: Have you spoken to your family’s financial advisor and CPA? Consider asking for an introduction, even if it’s over email.
• Account information: Get a list of all accounts, including bank accounts, credit cards, pensions, annuities and life insurance policy information. Get the ownership (titling) and beneficiaries.
• Physical security measures: Are there any valuables or key documents located in a safe deposit box at a local bank or home safe? Do people named to key roles know how to gain access when needed?
• Power of attorney: Especially for elderly parents and senior partners, it’s important to not only have a Power of Attorney and executors named, but also to ensure these parties are willing and able to take on their roles. This will require conversations ahead of time to ensure everyone is on the same page. This can be a simple way to ensure continuity and lighten the load for the family during stressful times. 

Having this basic financial information organized can be invaluable for anyone who may be called on to help aging parents during life or after it. Without a roadmap, family members are left to grieve while simultaneously serving as an executor or trustee, closing out an estate and playing "financial detective" to locate accounts and documents.

Communicating with parents

It can be beneficial to have a family meeting to discuss key roles, appoint advisors and share where information is stored. However, in reality, many aging parents prefer to keep their financial affairs private. If your parents are hesitant to share details about their estate plan or financial situation, emphasize that you aren’t asking how much you stand to inherit. You just want to know what to look for and who to turn to for help when the time comes.

If money is a sensitive topic in your family, when asking for an account list, consider narrowing the focus to only the necessary information. For example, you're not looking for dollar amounts. At the very least, they should share this information with the individuals named to key roles in their estate plan.

Additional steps for your household

In your own household, while it may be common for one spouse to be the family CFO, that doesn’t mean the other spouse should be in the dark. Here are some ideas to ensure both of you remain on the same financial page:

• Join meetings: Both you and your spouse should periodically join meetings or calls with your financial advisor to stay informed.
• Know the numbers: Go beyond a simple list of accounts. Both of you should understand your household income, expenses and a complete picture of your assets and liabilities.
• Participate: Both spouses should be involved in the financial aspects of big decisions and consider the financial trade-offs as a team.
• Understand your estate plan: Make sure both of you understand your estate plan and how assets will flow, which is especially important for blended families. If it's been a while since you last reviewed your estate plan, consider meeting with your attorney to ensure it still works for you.
• Define goals: Consider whether you have any unspoken financial goals and priorities, such as lifestyle, family support and charitable giving. 

Preparing for the financial future

While you can't prepare for every eventuality, taking these steps now can significantly ease the wealth transfer process later. It can also lay the groundwork for future planning, empowering your family financially and potentially saving them time, stress and money.

This article was written by Kristin McKenna from Forbes and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.