In many marriages, one spouse handles the day-to-day and the other handles the long-term decisions. Here's a five-question test to see if you could step in tomorrow, and how to start the conversation if you couldn't.
In a lot of marriages, the money gets divided without anyone ever deciding to divide it. One spouse pays the bills, manages the kids' accounts, and keeps the household running. The other handles "the investments," meets with the advisor, and signs the estate documents.
It's efficient, and it usually works. Until it doesn't.
I've sat across the table from enough women after a divorce or the loss of a spouse to know how the story often goes. The first thing I usually hear is some version of "I've never actually seen the whole picture." Not because they weren't capable. Because nobody ever sat them down and showed them.
It's more common than you'd think
UBS surveyed thousands of high-net-worth women and found that most married women leave long-term financial decisions to their spouse, even though the large majority handle the household's day-to-day expenses.1 UBS calls it "divide and conquer." It isn't a question of ability. It's simply how the work got split.
74% of widows and divorcees ran into negative financial surprises when they had to take over.
UBS Investor Watch, 2019
The problem shows up later. In the same research, three out of four widows and divorcees said they wished they had been more involved while they were married.2
The surprises are rarely dramatic. They're things like a trust that wasn't updated after the kids were born, an old 401(k) that still lists an ex-spouse as beneficiary, or a life insurance policy that quietly lapsed years ago.
The one-page test
Here's a simple way to find out where you stand. Could you answer these five questions today, without asking your spouse?
Could you answer these tomorrow? Check each one you could answer confidently on your own. | ||
1 | What do we own, and where is it? Every account, property, and business interest, and roughly what each is worth. | ☐ |
2 | Who inherits what? Not just what the will says. Beneficiary designations on retirement accounts and life insurance override your will, and they're the ones most often out of date. | ☐ |
3 | How does our trust actually work? If one of us dies, who controls the money, how does it flow, and what can the survivor change? | ☐ |
4 | Who are our people? Names and phone numbers for your CPA, estate attorney, advisor, and insurance agent. Bonus: have you met them? | ☐ |
5 | What would income look like if one of us were gone? Social Security changes, since the survivor generally keeps the larger of the two benefits, not both. Taxes often go up too, because after the year of death most survivors file as single instead of jointly. | ☐ |
If you answered all five with confidence, you're ahead of most people. If a couple of them made you pause, that isn't a failing. It's a to-do list.
Why now, not later
The worst time to learn your financial picture is the week it becomes yours alone. Grief and divorce aren't moments for clear thinking, and yet that's exactly when the biggest decisions tend to land.
It also explains why so many women change advisors afterward. McKinsey found that 70% of widows move their money to a new firm within a year of their spouse's death.3 In my experience, the reason is usually simple: the advisor only ever really talked to the husband.
How to start the conversation
Here's the good news. Most spouses who handle the long-term money want their partner more involved. In UBS research, nine out of ten men who take the lead said so.4 They just don't know how to bring it up either. A few ways in that tend to work:
– Make it a backup plan, not an audit. "If something happened to you, I'd want to know what to do" lands much better than "I want to check what you've been doing."
– Ask for one meeting with everyone. Sit in on the next advisor review, or ask for a joint meeting that includes your CPA. One hour together covers more than months of piecemeal conversations.
– Build your one-page map together. Work through the five questions above, write down the answers, and keep them somewhere you can both find.
How I work with couples
When I work with a couple, I work with both of you. Both spouses are in the meetings, both understand how the accounts and the trust fit together, and both know the CPA and attorney by name. When something changes, you both hear about it at the same time.
It isn't about taking decisions away from anyone. It's about making sure that if life changes suddenly, the person left holding the plan already understands it.
Never seen your whole financial picture in one place? That's a good place to start.
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About the author Matthew Holbrook, CFP® Holbrook Group, Coastline Wealth Advisory of LPL Financial | Newport Beach Matt has spent over 2 decades helping families, business owners, and professionals coordinate their investments, taxes, and estate plans. He works directly with each client and their CPA and attorney, so every decision pulls in the same direction. |
Sources
1. UBS Investor Watch, study of high-net-worth women, 2019.
2. UBS, women deferring long-term financial decisions to spouses, 2019.
3. McKinsey & Company, "Women as the next wave of growth in US wealth management," 2020.
4. UBS, "Own Your Worth" report, 2021.
LPL Tracking #1187483. This material is for general information only and is not intended to provide specific advice or recommendations for any individual. LPL Financial and its representatives do not provide tax or legal advice. Please consult your tax advisor or attorney regarding your specific situation.Matthew Holbrook is a registered representative with, and securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/ SIPC.