Death_Money

How to Spend Your Dead Partner’s Money

Most of us can barely tolerate the thought of a spouse dying, much less the panicky fear of wondering if we’ll be able to keep the lights on. Imagine that your spouse was not only considerate but also financially solvent enough to leave you instructions that make clear in no uncertain terms that there’s plenty of money, and simple instructions for how to manage it until your own death. Imagine that their plans for your financial well-being extend far beyond just getting by, and detail how you’ll live well, keep your home and provide for your children, and still have enough left over to give back philanthropically.

Then imagine the letter is written in the most condescending tone you could imagine.

That is what happened with “A Physician’s Letter to His Wife,” a doozy of a post that ran on the site KevinMD, which publishes scads of blogs and musings from doctors on every imaginable issue with a medical angle. The post itself was written by another doctor under the name The Physician Philosopher.

In the letter, the doctor outlines to his wife “exactly what you should do for our family” should he croak early and first.

When I die, you’re going to realize that you are immediately financially independent. If not, reading this will teach that to you.

With the money, you’ll be able to pay off all of our debts and have more than enough to last as long as you and the kids live. That said, you are likely to have no idea what to do with it given that you’ve always trusted me with the big picture of our finances. (We need more money dates, apparently).

So, I’m going to walk you through exactly what you should do with it.

Those steps, for anyone who doesn’t know what to do with the money when spouse dies and there’s actually money (most of us wouldn’t, since 75 percent of Americans die with an average of $66,000 in debt) are as follows:

  • Cash in the life insurance
  • Change the beneficiaries on her own estate planning to their children
  • Pay off all remaining debt (which should only be the mortgage)
  • Fully fund the children’s college funds, and multiply what’s left by 3 percent to figure out what she should live off of to let the rest grow
  • Invest the rest in specific Vanguard funds so it keeps on keeping on
  • Take all his work retirements and roll those into an IRA and then put that into a fund, too

From there, it’s simple: Create a trust for the kids and the estate. Dodge estate taxes as much as possible. And start giving back, baby.

The tweet promoting the story took a hit of backlash for a number of condescending, outright sexist-seeming assumptions the doc makes in the post, such as:

  • When I die, you’re going to realize that you are immediately financially independent. If not, reading this will teach that to you.
  • I know that you don’t like math, but you’ll have to do some.

Which is why people tweeted things like this:

Listen, no one has to explain to me why the post itself reeks of weird arrogant sexism. Women are bad at math, they don’t know dick about finances, yada yada. But most Americans, many of whom can’t scrounge up $1,000 in an emergency, find financial planning a remote concept.

Including me — and I’ve reported on finance, taken classes on investing, read extensively about financial literacy, and held a job at one of the top stock exchanges in the world. I still read that that letter faster than I could click “agree” on Apple’s terms and conditions, racing through it to find out what the hell you’d do with your money if you actually had any, even if it’s just to find rules I could apply right now.

Financial help is everywhere all the time, but the sort of advice that helps individuals marshal their own resources, or acquire them in the first place and not squander them, takes knowledge, savvy and dedication. If it were as easy as reading some blog, we’d all be billionaires.

Which is why people also tweeted stuff like this:

Furthermore, people are also woefully ill-prepared for their own death (and you only get one!), not to mention the deaths of anyone close to them. As Christine DiGangi at CBS explains about Americans and their average debt on death, debt stays in the estate of the deceased person. What that means is that if you have anything at all left over when you die in accounts, it will be picked over first by any creditors, who will siphon off what’s there until they are paid. If there’s money in your house, it will have to be sold to pay off whatever’s left.

Didn’t write a will? Enjoy the state stepping in for you to tell you where the money will go. That sounds easy enough — it goes to your descendants! — but good luck letting them fight over your stuff, sort out who will be the estate’s executor, and hashing out every little detail of how things will be sold off or otherwise split.

When my mother died in 2016 in Tennessee without a will, everything seemed simple enough. As the state dictated, whatever she left would be split equally between my three sisters and me. But it took nearly two years of sorting through nonsense to figure it out: debt, checking and savings accounts, retirement, various insurance policies without beneficiaries. We held debates over whether she’d really said she wanted to be cremated or not, or even have a service. Haggling over someone’s belongings to figure out what you want, what should be donated, what should be trashed and what may have value outside of your own sentimental association (and you haven’t even priced it yet!) is one of the most demoralizing, bleak experiences a human can have. And all that, in the midst of complex grief, complicated by even more complex relationships between those of us still living.

In other words, I’d have given anything to have someone hand me a letter that said: There’s plenty of money. Pay off the debt. Then take this amount and multiply it by .03 and live well.

Sure, I could live without the sexism and arrogance, but if you have the knowledge to pass on, please, please tell us how to keep our money making money forever.

All I have to do is get a bunch of money first.