I work for a decent sized law firm and often help out in Trusts & Estates. My firm will do wills and POA as a courtesy to any employee. I still didn't have mine done until I already had both of my kids and my T&E partner made fun of me (and an example) in front of some clients, telling me to get it done the next day.
We made wills, POA and durable medicals. We also had insurance that we purchased when my older son was very young. We bought 10 year term. This year, the 10 years came up and we needed to purchase another policy. We doubled my coverage and increased the term to 20 year policies. The costs went up (we are 10 years older) + I was not as thin as I could have been; therefore my premium was higher.
Since then (December 2009), I have lost 30 lbs and at the end of the first year, I will provide a drs note detailing my lower weight to the insurance company, and my premium for the remaining 19 years will drop by about $80/mth. But we also redid our wills, and I insisted on changing the payout of the insurance proceeds to 50% for the kids, 50% to my husband, and the money goes into a testamentary trust in both cases.
In our house, I take care of all of the finances, have all the bank accounts, do all the bills, insurance, etc. DH knows nothing, says he can't understand it at all. Fine, so all of the papers are in the "important paper box." But one thing I did was think long and hard about my durable medical and changed it from dh to my mom and sister. I watched him last year when his mom was diagnosed with Stage 4 ovarian cancer and frankly, I don't want him making any medical decisions for me. He simply doesn't understand what the drs were telling him, he didn't know what questions to ask about her finances, how to proceed with care after the hospital, medicare, etc. It was sad, and I ended up having to do it. So I decided that I didn't want to leave any of those decisions to him and made it over to my mother and sister, who is smart and competent and will make the right choices.
As for the money, I have access to the lawyers, financial planners, bankers, insurance agents. He doesn't have a clue who any of them are, so I realized that having them hand him half a million dollars was not a smart decision, so it goes into split trusts. He and my sister are trustees for the kids (which means that anything other than basic care expenses must be approved by her) and he and my sister are trustees on the trust for him, protecting him from pulling a hunk of money and buying himself a new sports car and not having enough to cover necessary expenses down the road.
Now this is more than you wanted to know, but what I'm pointing out is that estate planning is more than buying life insurance. I also have through my job that will cover death expenses and provide some ready cash, but we have coverage until the boys are out of school. I also have the option to convert or add in the next few years and will do so as finances allow. But it's important to understand your spouse and know what they can handle and what they can't and make proper decisions so that if the time comes, they are protected from their own inabilities (if they have them).
As for the allowance issue, my mom always handled the finances in my home growing up. Dad gave her his paycheck and she gave him an allowance each week, to be used for certain things (his lunch out, newspaper, that sort of stuff). Anything left over was his. Over the years, he used his saved money to buy her lovely gifts for her birthday and anniversary, never having to use a credit card and she never knew what things cost. When he passed away, we found over $1000 in his bureau that he had saved, along with the receipts for all of the jewelry gifts he had bought mom over the years. For the next few years, mom would use that money to buy the kids gifts like bikes, saying it was from "Pop."
Thank you for posting this and opening peoples' eyes to something so important (even if it's uncomfortable for some). Please have this discussion with your spouse today.
Missed changing that 8 years ago!
