Financial Planning Corner: Do NOT Forget Your Spouse

If you frequently read finance-related articles, you have probably heard about “The Great Wealth Transfer.” The Silent Generation and Baby Boomers are passing significant assets to Generation X, Millennials, and Generation Z. Of the estimated $84 trillion expected to be bequeathed over the next 20 years, roughly $12 trillion will go to charity, while the remaining $72 trillion will ultimately be inherited by intergenerational heirs. However, there is a transitional step some have not fully prepared for – the Spousal Wealth Transfer.

Approximately $54 trillion is expected to transfer between spouses before it reaches the next generation. Around 95% of that wealth is anticipated to go to women, as they tend to outlive their male partners by an average of six years. To help the surviving spouse understand their financial situation more clearly, we recommend that both spouses be involved in the financial planning process. If a surviving spouse has not been involved, regardless of gender, they may face significant stress during an already emotionally challenging time.

If one spouse has not historically participated in their household finances, it is never too late to start. The best time to plant a tree was 20 years ago; the second-best time is today. If you are the spouse who typically handles your finances, now is the time to get your partner involved. If you are the spouse who has historically taken a back seat on household finances, begin by:

• Familiarizing yourself with your bills and budget

• Ensuring you have access to all your accounts (bank accounts & retirement accounts)

• Learning where key information and documents are located

• Reviewing your estate plan with your spouse

• Knowing your trusted professionals (CPA, Estate Planning Attorney, & Wealth Management Team)

Once both partners are engaged, it is important to periodically review your overall financial picture for continued alignment with your long-term goals and objectives. Beneficiaries might need to be updated due to death, divorce, or marriage. Tax planning strategies may need to be revised as wealth grows or when new tax laws are passed. Estate planning documents may need to be updated when family dynamics or laws change. While it is best practice to review these annually, you should review them in detail at least every 3-5 years.

All of this might feel intimidating and overwhelming for some, as the first step is often the most difficult. A good place to start is by attending financial planning meetings, reviewing quarterly portfolio reports, and reading our quarterly Commentary – if you are reading this, congratulations, you have already begun! Understanding the basics of your situation will boost your confidence and lead to a smoother financial transition. Please reach out if you want to get more involved or increase your understanding of any financial planning topics. We are here to support you every step of the way. 

This Commentary is provided by Spraker West Wealth Management, a registered investment advisor, and is for informational purposes only. It should not be construed as investment advice and is not intended as a solicitation of any specific product or service. Investments and/or investment strategies include risk including the possible loss of principal. There is no assurance that any investment strategy will achieve its objectives. Information provided is not intended as tax or legal advice and should not be relied upon as such. You are encouraged to seek tax or legal advice from a qualified professional.