Which parent handles the finances? It very well may not be the surviving spouse.

• First help them in organizing what they have (03:29)
• Sort what they need and don't need (04:10)
• Add extra awareness in certain areas: social security, life insurance, annuities, IRAs (04:35)

Quote for the episode: "We're going to cover what you need to know about what financial challenges a surviving parent in this position is going to face, and what you can do to help and make sure it goes smoothly for them."

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Welcome to the Enjoy More 30s: Family Finance

podcast, the only podcast dedicated to making life more

enjoyable for young families by hitting on the financial topics

that tend to weigh on us, stress us out and distract our focus

from simply enjoying life.

Welcome to the third episode of the "Your

Parents Money Mindset" series. Last episode, we covered how to

extend some of those initial finance conversations to help

your parents ask more 'why' questions about their situation

that they may not have in the past. Today's episode is titled

"What About Mom? Surviving Spouse = CFO", but it is really

geared towards any surviving spouse. Statistically speaking,

mom is usually the surviving spouse more times than not. And

historically, and albeit stereotypically at least, has

also not been the one who maybe handled the finances. Overall,

though, this really goes for any surviving spouse who wasn't the

head of finance for the family. And every family, whether it's

mom or dad, someone takes the lead. And many times the longer

term surviving spouse is not the one who handled the financials

for the family. Think of your own situation- does you or your

spouse handle the finances and bills the majority of the time?

If something happened tomorrow, wouldn't it be difficult on the

other one? So today, we're going to cover what you need to know

about what financial challenges a surviving parent in this

position is going to face, and what you can do to help and make

sure it goes smoothly for them.

My grandfather, Grandpa Joe, was my idol growing up. He was laid

back, funny, easy to talk to. And as I mentioned in a previous

episode, he had always wanted to be an accountant. It goes

without saying that he was the one that handled the finances in

his family then. He wound up having a number of different

health items as he got older, like a lot of people do, with

various stents in the hospital as well. These eventually

prompted him to teach my grandmother what he did with the

finances. How we organize the bills, where the files were

kept, what needed to be paid when and how. She learned

directly from him ahead of time. This was really, really

fortunate because if he had gone suddenly, as so many people wind

up going, there would have been no transition- it would have

been like a company with no succession plan.

So what you need to know is that if there is no transition

period, your parent who just lost their spouse of maybe 50

something years, will not only have to go through all the

intense grieving of losing the most special person in the

entire world to them, but they will also have to figure out

where every bank account is, where every investment account

is, what credit cards are had, what bills need to be paid, how

these bills get delivered, what income sources are going to

continue, which ones aren't, any life insurance policies in

force, and the individual contact information for all of

those places. They will be completely overwhelmed, it kind

of goes without saying, and they're going to need help. The

one fortunate thing, though, is that they will likely want you

to help, whereas they may not want you to help right now. They

never did this before, they just lost their spouse. So from what

we have seen, they tend to be more open to assistance at this

point.

What you can do first is to help in organizing, if this is where

you are. Start with what they know. What bank they use is a

great start because you can see where all the forms of income

come from- what pension, Social Security, annuity or investment

income may be deposited. From here, you can then contact those

sources to see what is going to continue to come, what is going

to stop and what needs to be retitled into your surviving

parents name. You can also, likewise for the bank accounts,

tell what expenses come in on a monthly basis, and start to get

an idea of what expenses they may continue to have now that

they're on their own.

The next step after organizing is helping to sort what they

need and what they don't. If your mom has two IRAs, for

example, and your dad has three, your mom as a survivor probably

doesn't need five IRAs- consolidating could very well

make sense. This is also a great time to make sure that all the

accounts have updated beneficiaries, so go to the

children or whoever else they kind of wish it to go to.

Lastly, here are a few areas that can benefit in particular,

from some additional awareness. Only the higher social security

will remain. So when looking at the bank statements, if dad made

more, then regardless of survivor, dad's amount is going

to be the one that stays. Life insurance can be a bit tricky.

Policies may not have any premiums at this point later on

in life if your parents still hold them, or they may be

through a previous employer as a retirement benefit. So make sure

to dig up and check on any files that you may find. Annuities

really are particularly confusing. You really need to

make sure you understand what you are signing to. Are you

continuing in the income? Are you annuitizing, which generally

is not recommended as any principal balance is forfeited

at death. Are you incurring any new surrender period that will

make the funds less liquid for what they told you to do? Ask a

lot of 'why' questions here, as seniors even have special rules

now when it comes to annuities, because there were too many

cases of improper product recommendations let's say. For

IRAs, same thing. Again, you want to make sure you understand

your options. They can combine these accounts without incurring

taxes if done so with direct transfers. Liquidations will

cause the full values to be realized immediately, which is

taxable. Many institutions in the course of our workings with

clients here, "I'm calling because my spouse died and I

want to get to the money", and paperwork is filled out for

direct redemptions, which triggers that potential huge tax

liability. Lastly, you can also consider and discuss at this

time a power of attorney, or a POA as it's referred to, whether

immediately active to help now, or active upon your surviving

parent becoming, you know, incapable in some respect in the

future. Having no designated individual once in a crisis

situation produces even more stress, especially if there are

a number of children with perhaps differing points of view

of what should be done. The POA is what says, "This is the child

that I want to be making these decisions for me ahead of time."

So as a quick recap for today. First, you probably know who

handles the finances between your parents. Second, expect

that if that parent passes first, there will be significant

assistance required. Next, start with organizing what they have.

Kind of like a 'laying out all the Lego pieces first before you

try and reassemble' kind of mentality, which generally

starts with the bank statements. Lastly, help in adding extra

awareness in certain areas such as social security, life

insurance, annuities and IRAs to help ensure no unfixable

mistakes are made along the way. And think about getting that

appropriate POA in order ahead of time.

Thanks for tuning in today. As always, if you are able to

implement what we cover, then that's fantastic. You have less

to worry about than before and can focus more on enjoying life,

which is the goal of all these episodes. If you are wanting

help with these things, though, or have questions you need help

in clarifying, check out the 'Ask Joe' section on the show's

website, www . enjoy more 30s .com, that's enjoy more three

zero s .com. Lastly, please make sure to subscribe and review us

on Apple podcasts if you did enjoy what you heard today, or

wherever you listen. There are literally millions of young

American families out there I'm trying to reach and help just

like you. The next episode is "Inheriting Assets,

Opportunities, and Headaches" where we're going to cover the

challenges once assets start passing from your parents to

your generation, and the items to look out for and steps to

take to perhaps avoid ahead of time to make it go more

smoothly. Until next time, thanks for joining me today and

I look forward to connecting with you again soon.

The conversations on this show are

Joseph's opinions and provided for general information purposes

only. They do not constitute accounting, legal tax or other

professional advice for your specific situation. You should

always seek appropriate advice from a financial advisor,

accountant, lawyer or other professional before acting upon

any content or information found here first. Joe is affiliated

with New Horizons Wealth Management LLC, a branch office

of TFS securities Inc and TFS advisory services, an SEC

registered investment advisor member FINRA/SIPC.