John L. died of cancer at age 57. Luckily for his 51 year-old wife Erika, they had prepared in advance. They had put together a customized estate plan to give Erika the authority she needed to use their money and property while probate was still pending.
“We had everything in place,” said Erika. “I had no idea how to do any of this.” The preparation had paid off — she understood her financial situation and had the authority to act right away. John had a will and had put in place powers of attorney for finances and healthcare.
“Realize that you need to take the time to understand your finances,” Erika urges. “When you’re well — that’s when you need to plan.”
Census Bureau: Women live an average of 14 years as widows
According to the U.S. Census Bureau, over 800,000 people who die each year leave a spouse behind — astonishingly, 700,000 of those dying will be men. A quarter of the population of people over 65 is made up of widows and widowers. Yet a lot of people don’t think much about how they’ll get along once their spouse passes.
Worse, among the 65-plus generation today, many women have left financial decisions entirely in the hands of their husbands. That can leave them helpless if they don’t know even what accounts exist.
So the first step toward easing your spouse’s transition is to organize your assets. Make a list of all your bank accounts, retirement accounts, investments, insurance policies and other property, along with a list of credit cards, car loans and other debts. Ensure this list is accessible.
Powers of attorney fill a crucial need at the end of life
The next step, according to one estate planning lawyer, is to ensure that all your assets are titled jointly with the right of survivorship. As you’re doing that, create durable powers of attorney for financial decisions and for healthcare.
A power of attorney for healthcare gives a designated person — usually your spouse — the right to make decisions about the medical treatment you receive if you are unable to communicate. A power of attorney for finances gives the designated person the authority to pay your bills and make other decisions regarding financial matters. Both are absolutely crucial at the end of life.
The probate process should eventually give title to property and financial accounts to the surviving spouse, even if the dying spouse was unprepared. You will need the ability to pay bills, take out money, and make decisions long before the probate process is complete. A durable power of attorney is one way to ensure you have that authority.