Why both retired partners need to know what’s going on with the money

03 September 2015

Ensuring that your wife or partner is informed enough, and equipped, to manage the finances should something happen to you, is just as important as making sure that your family is provided for financially.

It is not uncommon among New Zealand retired couples to encounter a situation where the husband, or male partner, has passed away suddenly, and left the woman in the relationship poorly equipped to manage the finances, even to the point of knowing nothing about them.

When you throw in a situation where some of the financial structures – such as trusts – have not been updated and trustees have retired, moved away or are deceased themselves, it can create a precarious and vulnerable situation for the surviving partner.

There may be a number of reasons for why this happens. You may believe you are being protective, or your partner may not have any interest in finances and administration, and simply avoids it. Or you have both just fallen into roles that you’re naturally suited to and are comfortable fulfilling.

The author of the book What Every Woman Should Know About Her Husband's Money, Shelby White, says that whether through tradition or ‘money fear’, “women have historically let men handle the money in a marriage and haven't looked after their own financial well-being”.

Perhaps it’s because most of us also do not like to raise the subject of death. Families are uncomfortable with the thought, or possibility, of somebody they love dying. The author of the book Being Mortal, Dr Atul Gawande, says: “We are making bad decision out of our anxiety about having these conversations”.

It is a difficult conversation, but it is one that needs to be had.

Here are five ways you go about bringing your loved ones up to speed on the finances:

  • Draw up a budget and review it monthly with your partner;
  • Take big financial decisions together or, at the very least, involve your partner in the conversation;
  • Have a financial plan written down on paper. Discuss this with your financial Adviser, and have your partner attend those meetings with you, even if it is only to listen;
  • Review your plan annually, and have your partner attend those reviews. An annual review means structures and trustees remain up-to-date;
  • Leave a ‘to do’ list containing:
    • The names and telephone numbers of people who need to be contacted
    • A point-by-point summary of the financial position e.g. investments, insurance policies, bank accounts, balances; and
    • The ‘next steps’ your partner should take to assume proper control and management of the finances.

You and your partner are in your financial future together, so it’s best to have that hard conversation, and to share and plan your finances together. If you want more advice or tools on how to do this, get in touch with an AMP Adviser for help.

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