Finances for the surviving spouse

Finances for the surviving spouse sounds rather ominous. Why? Because we are saying that our husband or wife for the past umpteen years is now gone.

When that happens we want to make sure the surviving spouse knows how to handle money. It is extremely important for couples to sit down together and talk about money. In His infinite wisdom, God made two people who are generally opposites fall in love and then get married. In most marriages, you will find that you have a spender and a saver. Or as Dave Ramsey says, “A nerd and a free spirit.”

What generally happens is that the nerd will generally handle the money. They pay the bills, balance the checkbook, and make financial decisions. Even though God has equipped them with this wonderful quality, by handling all finances themselves and without the input of the free spirit, they are cheating themselves and their spouse. What happens if he or she dies first? Then, the free spirit is left without a clue about money.

Husbands and wives need to sit down together and make a money blueprint/budget/spending plan. They need to do this monthly. Both of them need to know how to balance a checkbook, how to pay their bills, and how to stay on the budget. Otherwise, the surviving spouse will be left in a financial maze with no clue on how to get out.

Also, couples need to make sure they have a will, a revocable trust, an advanced directive and durable power of attorney for health care, and a financial power of attorney. Be sure that you get these documents prepared by someone who is qualified, especially a revocable trust. They need to be properly funded otherwise you create more of a problem for your loved ones.

Before you set-up your revocable trust, please read this article on myths about revocable trusts prepared by The Castelum Law Firm.

If we have these documents in place, we protect our loved ones. With a will, we express our desires for the disposition of our assets, be they many or few. We designate who will take care of our young children. To me, this is the most important reason to make a will. To protect our children. We don’t want them going to someone who doesn’t share our value system. We want them to be raised with the same values we would have instilled in them had we not died before they became adults.

Advance Directives:

You can download an advance directive for your particular state by visiting Caring Connections. Caring Connections provides the following information on advance directives:

“What are Advance Directives?

A living will allows you to document your wishes concerning medical treatments at the end of life.

Before your living will can guide medical decision-making two physicians must certify:

    You are unable to make medical decisions,
    You are in the medical condition specified in the state’s living will law (such as “terminal illness” or “permanent unconsciousness”),
    Other requirements also may apply, depending upon the state.

A medical power of attorney (or healthcare proxy) allows you to appoint a person you trust as your healthcare agent (or surrogate decision maker), who is authorized to make medical decisions on your behalf.

Before a medical power of attorney goes into effect a person’s physician must conclude that they are unable to make their own medical decisions. In addition:
If a person regains the ability to make decisions, the agent cannot continue to act on the person’s behalf.

Many states have additional requirements that apply only to decisions about life-sustaining medical treatments.
For example, before your agent can refuse a life-sustaining treatment on your behalf, a second physician may have to confirm your doctor’s assessment that you are incapable of making treatment decisions.

What Else Do I Need to Know?
Advance directives are legally valid throughout the United States. While you do not need a lawyer to fill out an advance directive, your advance directive becomes legally valid as soon as you sign them in front of the required witnesses. The laws governing advance directives vary from state to state, so it is important to complete and sign advance directives that comply with your state’s law. Also, advance directives can have different titles in different states.

Emergency medical technicians cannot honor living wills or medical powers of attorney. Once emergency personnel have been called, they must do what is necessary to stabilize a person for transfer to a hospital, both from accident sites and from a home or other facility. After a physician fully evaluates the person’s condition and determines the underlying conditions, advance directives can be implemented.

One state’s advance directive does not always work in another state. Some states do honor advance directives from another state; others will honor out-of-state advance directives as long as they are similar to the state’s own law; and some states do not have an answer to this question. The best solution is if you spend a significant amount of time in more than one state, you should complete the advance directives for all the states you spend a significant amount of time in.

Advance directives do not expire. An advance directive remains in effect until you change it. If you complete a new advance directive, it invalidates the previous one.

You should review your advance directives periodically to ensure that they still reflect your wishes. If you want to change anything in an advance directive once you have completed it, you should complete a whole new document.”

Durable Power of Attorney for Health Care:

“This document, also known as a medical power of attorney, allows you to name a trusted person to make medical decisions for you if you are unable to communicate on your own. The person you name to make these decisions is usually called your agent or attorney-in-fact.

You can give your agent the authority to oversee the wishes you’ve set out in your health care declaration, as well as the power to make other necessary decisions about health care matters. Some states combine the declaration and durable power of attorney into a single form, most often called an “advance health care directive”.”

Financial Power of Attorney:

“Many people feel nervous at the thought of a power of attorney. It can be intimidating to consider giving another person or agent the authority to make financial decisions on your behalf.

There are valid reasons to consider a power of attorney if the need arises. In layman’s terms, a power of attorney is a legal document that allows someone (an individual or an entity) to conduct business on your behalf. There is more than one type of power of attorney. These include both financial and medical.

A medical power of attorney should contain specific information about who can make medical-related decisions when someone becomes incapacitated and cannot make these decisions for himself or herself. Experts generally agree that financial powers of attorney should not include medical information.

A financial power of attorney can be either durable or nondurable. It is important to know the difference and when you may need one or the other. Most people consider durable powers of attorney when there is a chronic illness involved or a date in the future when it might be foreseeable that illness can be disruptive to someone.

Financial Areas to Consider:

Regardless of the type of power of attorney chosen, there are broad areas of consideration concerning finances. These include (but may not be limited to) the following types of financial transactions:

Each state allows for fairly standard rights to be allowed through a power of attorney, although you want to do specific research in your state if there are unusual financial circumstances to consider.

Nondurable Power of Attorney:

A nondurable power of attorney is generally used for limited transactions. For example, if someone needs to grant authority for a single transaction, such as a stock trade, a nondurable power of attorney would be most applicable. Another reason to use a nondurable power of attorney would be if someone were traveling and unable to conduct business from home. Some states refer to this type of power of attorney as a special power of attorney.

Durable Power of Attorney:

A durable power of attorney is the one that often comes to mind. These are the legal documents that can start immediately and allow someone to act on your behalf until it is either revoked or upon your death. For individuals who are facing a chronic, debilitating illness or who may be preparing for a future incapacitation (such as a possible nursing home commitment), a durable power of attorney could fit these situations.

A durable power of attorney can be written so that it can be invoked at a future point in time. For someone with a chronic or potentially debilitating illness on the horizon, this type of instrument may be best to use. Usually a physician or other recognized authority will designate the time when an individual is no longer competent to manage their own legal affairs. At that point in time, the power of attorney will “spring” into place, allowing your agent to begin managing your financial obligations. For this reason, sometimes you may see references to a “springing” power of attorney.

Choosing Someone to Manage Your Affairs:

Deciding which type of power of attorney may be straightforward, depending on the circumstances. Finding a trusted person to manage your financial affairs may not be as easy. The “agent” can be a family member or friend whom you trust to manage financial affairs with the same due diligence as you would yourself.

It is generally a good idea to appoint more than one agent, even if you specify that only one of them may act at any given time. For example, a husband gives his wife power of attorney upon finding out that he has Alzheimer’s disease. The wife subsequently becomes incapacitated and is unable to care for her affairs, as well as that of her husband’s. Having more than one agent appointed will allow the husband’s power of attorney to stay in force without possible legal proceedings over his affairs.

Preparation and Filing:

You can find standard durable and nondurable power of attorney forms online at several different websites, or an attorney may give you a standard one that includes powers that you can grant or strike, depending on your individual circumstances. An attorney can prepare one for you for a fee; however, it is not necessary for an attorney to be involved unless you have special circumstances to consider.

A power of attorney is still valid, even if it is not on file at your local county clerk’s office. It does need to be signed in the presence of a notary public. It is especially important to keep originals safe, as sometimes banks and other entities will want to make a copy of the original when granting someone else access to your private financial information.

Can I Still Manage my Own Finances?

In most cases, the answer is yes. When a “springing” power of attorney is in place, someone other than the agent will make the decision to enforce the power of attorney. Until that point, you are still able to control your own financial decisions. For other situations, as long as you are comfortable making financial decisions, there is no reason that someone else has to do it for you.
What if it Doesn’t Work Out?

A power of attorney can be revoked at any point in time. Usually they are revoked when either the agent or the principal (the person who needs financial affairs managed) decides that the arrangement isn’t succeeding as planned. While it is not necessary to contact an attorney to prepare a power of attorney, some experts suggest that consulting an attorney may be wise when revoking one.

Compared to making the financial decisions, invoking a power of attorney can be a relatively simple process. Before developing one, make a list of financial obligations and decide how you would want these handled in the event that you are unable to take care of them yourself. Discuss your decisions with loved ones and develop a trust relationship with someone that would be designated as agent. If possible, find more than one agent to avoid delays and other legal complications in the event that your first choice is unable or unwilling to perform the necessary requirements. Decide if you need a durable or nondurable power of attorney. Finally, develop the power of attorney and have it signed. Keep the original in a safe place and make certain your agent(s) knows where to locate it when it is needed.

Discussing issues related to handling financial information is best done in advance when the stress of a chronic illness or debilitating condition will aggravate a situation. Calm decisions made in advance will allow others to make informed decisions when the power of attorney is in force.”

Hopefully, this post helps you in preparing your surviving spouse to carry on without you.

(Please note that in no way am I affiliated with any of the firms linked within this post and do not receive any type of remuneration from them. The links to their pages were found through research on the net. Please consult with a qualified professional to draft your documents. MrHerrera is not liable for any harm or loss incurred by you for following the information contained herein and/or within this site.)


More Posts

Debt-free College Degree

Debt-Free College Degree

Image: Freepik Embarking on a journey through higher education can be both exhilarating and daunting, especially when the looming specter of student debt casts a

Poverty on the rise

Poverty on the rise

As the United States continues to deal with the repercussions of the COVID-19 pandemic, many individuals



The Bible saying, “He who is faithful in what is least is faithful also in much; and he who is unjust in what is least

Send Us A Message