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By Christine Benz | 02-29-2012 01:00 PM

Creating a Goof-Proof Plan for Your Spouse

Regular communication and a simple investment strategy will help your surviving spouse thrive, says advisor Stacy Francis.

Christine Benz: Hi. I'm Christine Benz for Morningstar. Many financially savvy individuals would like to create financial plans that are goof proof, in case they should predecease their spouses. Here to share some tips for doing that is Stacy Francis. She is president of Francis Financial in New York City.

Stacy, thank you so much for joining us.

Stacy Francis: Thank you. I'm excited to be here.

Benz: One topic I'd like to cover with you Stacy is, how financially savvy spouses, the one who is hands-on in the household with the money, can help leave the nonfinancially savvy spouse in good shape. So if the first spouse predeceases the other one, how can they make sure that the nonfinancially savvy spouse has kind of a plan and the ability to navigate? What are your tips?

Francis: The biggest tip is to make sure that you understand what's going on, and we all have busy lives. Often you just don't find the time to really sit down and review everything. So instead, what you should be doing is making a financial date. This is a financial date once a month, and on that financial date, you bring the papers, you bring everything. You spend the first half hour really talking about your finances with regard to investments, life insurance, disability, and even just those normal household bills that seem to always be coming in the door.

If you do that on a monthly basis, even if that nonfinancially astute spouse doesn't play as much of role on the day-to-day duties, they will understand the overall picture. And if unfortunately you are not there to help them in the future, they are going to be able to survive and actually really thrive going forward.

Benz: So do you have any tips, Stacy, for organizing documents, to make sure that your spouse could readily put his or her hands on the right information if he or she needed to?

Francis: There are two different file systems that you can have. You can have a file system that's actually a physical file system in your home with tabs listed for insurance, investments, taxes, budgeting, wills, and estate planning. 

You can also have it online on your computer with a similar filing system. Both work very well, and which one is going to be right for you is really about your personal situation and your spouse's. Some spouses really don't feel comfortable using the computer and so in that case maybe it's that physical-document program that you would be using.

Others feel very comfortable using that online, but no matter what it is, you need to have that very clear filing system and also keep it up to date. And guess what? The benefits are not necessarily just going to be filed if for some reason you are not here and unfortunately pass away in the future. Having an organized filing system is going to save you hours a year, especially when it comes to tax time, and we know how complicated and frustrating tax time can be.

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