Note: Some contents of this post may be considered sensitive
Chris and Vicki were married for 8 years. They both had been married before, so they dated for a couple years before tying the knot. They wanted to be sure the second time around.
While they never had any kids together, Chris was an amazing step-father to Vicki’s daughter, Tara.
Tara was an 8th-grade honor-roll student. She wasn’t boy crazy yet because Vicki and Chris kept her involved in dance and theater.
Chris was a 49-year-old alpha male. He was protective of his family and a great provider. He was appreciative & respectful of the contributions that Vicki made to help them achieve their goals together. Their marriage was a real partnership.
One day around noon, while each of them were working, Chris and Vicki chatted on the phone about their upcoming vacation.
The discussion was mainly about the destination. Should they visit the west coast to spend time with Vicki’s extended family or go someplace tropical to be beach bums for a week?
Chris needed to complete a work project before leaving for the day. He told Vicki they would finish the discussion that night. “Love you,” she whispered into the phone. She almost always held her breath as she waited for his consistent response. “Love you back,” Chris replied.
Evening came, but the vacation conversation never continued. Chris was killed in a car accident on his way home from work.
Vicki and Tara were devastated. Chris had been a major part of their lives. Now out of nowhere, he was gone. Vicki knew that life would be different.
Chris was the person that made her feel better when she had a bad day at work.
He was the one she shared her innermost fears and dreams with.
Chris was also the one that attended to most of the financial responsibilities. He handled most of the bill paying and kept an eye on their retirement and savings accounts. Vicki found slight solace in knowing that Chris had made sure they would be well taken care of financially.
That was until she discovered that one of his older life insurance policies had never been updated.
Chris had life insurance policies through his employer and outside of work. There was one policy he converted after he left a previous employer a few years back.
He had been paying on the policy for years. When he converted the policy he was still single.
He intended to update the beneficiary information but was busy with something else when it arrived and eventually he forgot to complete.
Now the $100,000 check wouldn’t be sent to Vicki to deposit into her account. It would be sent to his ex-wife.
Her first thought upon discovering the news was “You’ve gotta be freaking kidding me!”
Chris and his ex-wife didn’t have children together. Vicki wasn’t her biggest fan and Chris wasn’t either.
He would never have wanted the money to go to his ex. Vicki was confident of this based on conversations she had with Chris over the years.
The divorce decree did not stipulate that his ex-wife needed to remain a beneficiary on the policy.
Vicki figured it was an oversight on Chris’s part, but unfortunately, there was little she could do. [They didn’t live in a community property state].
Losing Chris was a huge loss for their family.
The stress of funeral planning and navigating life without him was an overwhelming feeling. Dealing with the life insurance surprise added to the stress of it all.
Ultimately, there was enough money from the other policies to cover living expenses and pay off a few bills, but an extra $100,000 would have provided more breathing room.
This situation is not uncommon.
But it you put aside the emotional aspect of this story for a moment, you can see the practical side.
Today you’re the love of his life.
There may have been a life before you.
There may have been a wife before you.
What about his mother? Maybe you love her. Maybe you…could do without her. 🙂
But before YOU came along, she may have been the top priority in your mate’s life.
What if your mother-in-law got life insurance money that was supposed to go to you?
What if it wasn’t a life insurance policy but a bank account?
What if her name was still on an old bank account with a $2,500 balance?
Legally, as joint owner of the account, she has the discretion to do whatever she wants with the money.
Your mother in law could be the nicest woman on the planet today. Most people are nice until there’s a money situation.
Fighting over money can seem petty. $2,500 in the grand scheme of things…petty. $100,000…now that’s a different story in my world.
Here’s something else to consider.
Women in the United States typically outlive men by an average of 5 years.
What does that mean for you? Whether it’s an accident or natural causes, there is a high probability that you will outlive your husband.
You need to be as prepared as possible for this.
Life is busy! Important items get put off all the time.
Everyone makes mistakes. Some are little Tinkerbell mistakes, while others are worthy of multiple curse words and tears.
It doesn’t matter if your family has millions or $250 in the bank.
We see stories on the news quite often about people that didn’t update their estate plans or critical life documents.
Think about the tragic deaths of Whitney Houston and Bobbi Kristina. While it wasn’t a life insurance mishap, there were estate documents that were out of date. Maybe the assets ended up exactly as intended, maybe not.
I’m sure you can think of someone you know personally that was affected by an unexpected event that resulted in financial misunderstandings or difficulties.
When you’re discussing the situation with a friend, you sympathize. You might even think, “I really need to get my stuff in order so that doesn’t happen to us.”
Then dance lessons, sports practices, family gatherings and vacations get in the way. Again and again.
While, this is not uncommon it may cost you more money and time than you planned to fix mistakes.
Plus, you guessed it – It is avoidable.
Disclaimer Notice: As a friendly reminder, I am not an attorney nor insurance advisor. I don’t even get to play one on TV. Therefore, the information within this article and website is provided for informational purposes only. Please consult with the proper legal or financial professional before taking action. Deciding to take a stab at things without proper consultation is at your own risk, beautiful.
It might be worth your time to schedule an in-depth conversation with your significant other. It’s important to make sure you are both on the same page about your finances and particularly your beneficiary information.
Think about the situation from a different perspective.
Can you confidently say that you’ve crossed all your “T’s” and dotted your “I’s” of your personal financial information?
What if YOU were the one with outdated account information?
Take a moment, think about bank accounts, retirement accounts, investments, etc.
You work really hard to take care of your family. It’s important to you to make sure that happens the way you intended even if you’re not there to boss them around.
Sure, there are laws in some states that can protect against some of this chaos. Do you really want to split your money with the lawyers?
Do you really want to rely on changing legislation to protect you?
I’m not sure what your number is.
Maybe your number is $2,500. Maybe it’s $100,000.
But you know, there’s an amount that would make you go batsh*t crazy if it went to another woman.
You have the power to avoid the pain and frustration of this situation.
I didn’t write this post to make you feel guilty. I didn’t write this post to make light of a tragic situation.
I wrote this post to acknowledge the uncomfortableness of this topic and how it leads to no action.
I wrote this post to acknowledge the comfort with procrastination and how that can lead to disaster.
It might be uncomfortable to have the conversation but it’s definitely worth it to make sure your everyone’s intentions are known and respected. It’s about much more than money.
Founder & Managing Director
Nikki is a 16-year financial services professional and the primary divorce financial strategist for The FIIRM Approach. She helps female breadwinners prepare for divorce to avoid common financial mistakes and confidently maintain their financial security. She uses proven strategies within the FIIRM Approach methodology so her clients can manage their money, debt, and credit in their new financial life. TAKE ACTION & LEARN about the tools that can help make your new money life easier. Grab your FREE Ultimate Resource Guide HERE.