I’ve Paid For This Twice Already…

Frugal living and debt reduction tips for a better financial future. This is one family’s story.

January 26th, 2009

Things I’ve Learned Losing A Parent

My father passed away a week ago, and my life will never be the same.

I’ve spent the past week on the east coast, helping sort out things to a manageable level for my mother, and grieving the loss of my father.  My dad was the one who managed their money – he paid the bills, he made the financial decisions, and frankly he earned most of the money.  My mom is capable of handling things, but it is a lot to take over all at once when you haven’t done it at all in almost 40 years of marriage.  There are several things that my dad did before his death that helped us muddle through it all, though.  These are things he always did – he died very unexpectedly but he was a stickler for organization and order.  But for me, it was a wake up call to what I need to do to help my spouse if I was to pass away first.

1.  Have a list of monthly bills or an easy to understand budget.  My dad made a list every month in a notepad that included a snapshot of their entire financial picture – what was going out, what was coming in, what they owed money on.  It only took me a few minutes of doublechecking to be up to speed on what bills they have and how much money went in and out in a typical month.

2.  If you use the computer, have a list of logins and passwords.  Literally, this saved us eons of aggravation.  My dad had a list of every website he did business on, every login, and every password.  So all the bills my dad paid online, my mom can too right now.  I could log in to his email and check on things, I could login to all his payment sites – and I’ll be able to do so long distance as well if my mom needs more help.

3.  Pay your bills well before the due date.  My dad always had everything paid as soon as the bill came in.   For example, he passed away on the 19th.  If it was me, my mortgage would have to be paid by February 1st.  Not my dad.  He’d paid the February mortgage already.  Their next due date is March 1st.  All his bills were like that, and it gives my mom a lot of wiggle room to figure out what she’s doing.  Nothing is due until at least mid-February.

4.  Have your records up to date.  Even my dad’s visit to the pet store for cat food the night before he died was in his checkbook ledger.  His balances matched the ones at the bank exactly to the penny.  I didn’t have to worry there were things looming out there we didn’t know about – everything from automatic debits for insurance to every debit transaction was neatly noted in the checkbook.

5.  Keep important papers organized, and your current records too.  I found easily everything I needed to sort of their finances because my dad kept everything neatly organized in two filing cabinets.  From last year’s taxes (so I can help mom with this years), to records of the bills he paid by check, insurance policies, and anything else I could think to need, it all was there.

6.  I hate the stock market.  My dad’s 401K is worth literally half of what it was a year or so ago.  And we need to roll it over into an IRA for my mom.  It feels like I am going to lock in all those losses and it makes me literally cry.  I am going to talk to the HR department at my dad’s work and try and figure out what to do.  Of all the financial aspects, this one literally depresses me.   I still have a lot to figure out about what should be done here.

7.  Have more life insurance than you expect to need.  My dad did have some life insurance, not a whole lot – but at least some.  Life insurance is not taxable income according to the IRS (something I learned this week) so my mom will be okay for a little while.  She doesn’t want to keep the same life they were living together, but she also wants to have time to decide what she wants for the future.   And the life insurance will let her do that.

I’ll be back in the groove of posting soon, but it may be a bit sporadic this week.  I’ve had a lot to process and a lot of figure out.  My mom is ready to be in charge of the bills and she has some money to do so.  Which gives us all more time to grieve.

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42 Responses to “Things I’ve Learned Losing A Parent”

  1. Sorry to hear about your father I too lost mine 2 years ago so I know what you are going through. I am so glad he made it easy for you to fine everything you needed, my mom does all the bill for her house and there are times I wish she would sit us all down and have us do them with her instead of just my older brother. I get very frustrated with her on some of her decisions with the bills. It sounds like you are headed the right direction with the 401K and good luck with it all. I have just started reading your blog but I do enjoy it.

  2. I would like to lead in that I am sorry for your loss.

    I think that the idea of locking in the losses when you rollover from the 401k to an IRA is a misconception. Unless the 401k had access to some esoteric funds that are not available to the publish, you can purchase the same investments in the IRA as the 401k had. Even if there are some special funds, you can purchase materially similar funds in the IRA. As a result of this fact, you are going to be getting the same amount of equities for your buck transferred in (since they are cheaper now) than the equities that you transferred from. The only way you would lose money in this process is if the market shoots up a high percentage in the days that the money is out of the market for the rollover.

  3. *to the public

  4. @Brandon – I know that, intellectually. But I’m not sure if I can just choose the exact same funds – and I am scared to choose different ones. I can end up with the same percentages, but different things and I don’t want to feel personally responsible for making bad choices.

    I’m going to have a financial advisor of some type help me with this. I’m a bit (no a lot) overwhelmed about things. ;)

  5. Sorry for the loss of your father. Hang in there.

    Please be very careful with the 401k decision. The best action may be to let it sit until YOU know what to do with it. Take some time to educate yourself about investing. Read a few books about investing in index funds.

    Please be very careful about seeking advice from a financial advisor.

    While CFP’s provide a valuable service, they are seriously lacking in the arena of providing investment advice- they spend little time studying investing opportunities. It’s not too difficult to compare the past performance results of mutual funds (and that’s how they will pick your investments). Indeed, past performance is a poor method of predicting FUTURE performance. Also, if your investing knowledge is limited, how would you know if the advice is any good?

    The best financial advisor you’ll ever find is YOU.

  6. I’m so sorry for your loss. I hope people learn from your list here. It’s weird but my dad’s stroke was a wake up call for me about my parents’ life insurance coverage. At this point, my mom needs to have more coverage than my dad, but that’s not way things are and I had to convince my mom that her life was now more ‘valuable’ than my dad’s. Her whole view of breadwinning is now upside down since she’s the one holding down the financial fort keeping the business open and not my dad.

    Life insurance decisions are not a one-time thing. It needs to be reviewed periodically since the coverage you bought when your kids were little is different than what you’ll need once they’re finished college.

  7. @Mike S – I’d love to just let things sit how they are, but the 401K is an asset in my father’s name that now needs to be distributed to my mother as beneficiary. Death does that.

    If I can just roll it over to an IRA that has the exact (and I mean exact) same assets/percentages etc as the 401K does now, that is what will be done and it will sit like that while we take our time figuring out what to do. It is if I can’t just make it basically the same, just called “IRA” instead of “401K”, is when I’ll have to make some choices, and I will need help.

  8. I’m sorry that you must deal with these things while you are also grieving. That is difficult. Please know that my thoughts are with you.

    I don’t agree with Mike, completely. He does make a good point about financial advisors, in general, but our financial advisor (here in Chicago) is amazing. We spend two hours with her at each meeting, four times per year; she fully understands our risk and our life. I think, if you’re looking to talk with a professional, you should seek someone who is sensitive to personal needs and to personal ideas about money and investing.

    I can forward her number to you if you’d like. Let me know.

    Again, condolences.

  9. *meant to say ‘risk tolerance.’

    :)

  10. Great list. I would also include to set up autopay on bills, I have all but a few set up this way.

    It’s also important to keep your spouse informed each month, not necessarily in depth but general info.

    We made lists of all of our important info: life ins, retirement plans, all the accounts held, bank, savings, iras, cd’s, credit cards, etc and gave a list to my parents to put in their safe and a list to our best friends to keep just in case. That way if something happens to both of us they have the needed info.

    Great idea to keep log-in’s & stuff. We keep ours stored on the coputer in a special program called One Password. Make sure if you have that info, it’s under lock and key!

  11. You are an amazing person. I have been overly impressed at how when your father died, you jumped right in and helped out your mother. I’m sure it was very tough for her and I bet should would hate to have to go through your father’s papers to figure everything out.

    I probably would have been devastated and wouldn’t be able to think straight. I’m sure your mom is really appreciative for all you have done for her.

    I am sorry for your loss.

  12. Thanks so much for posting this. I’m going to treat it as a to-do list for myself. I’m also going to feature it on my blog.

    Again, I’m so sorry about your father.

  13. What an amazing father you have. His attention to detail and to making sure he faithfully kept the records up to date is a testament to that. I would imagine you inherited alot of his great qualities.

    I am glad that he was so organized. During a time of grieving it’s hard to think, let alone figure out someone’s financial situation.

  14. It sounds like your dad was a very organised guy.I think that you shouldn’t worry too much about the 401(k)/IRA issue. You should be able to get really close to the same stuff that was in the 401(k) and then your mum (and you) can work out what needs changing a little later.

    Best wishes and good thoughts.

  15. It is such a huge help your father did all of those things. It make the financial part of a hard situation a bit easier, as you don’t have to worry about figuring out the financial peice. Again my sympathies.

  16. I wanted to drop by and wish you luck. You’ve got a great head on your shoulders and are displaying amazing perspective. Somehow in the midst of this all, you’ve made some excellent points on being prepared for the unexpected. I plan on going through my finances to make sure my wife knows how to access everything, like passwords and such.

    One other piece of ‘advice’ I’d pass along, is to be patient about re-investment of the retirement funds. Just make sure you (and your mother) understand what you are investing in. It is worth the extra time spent to feel a little more involved, and a little less helpless at least in one area of life.

    Again sorry for your loss. God bless you.

  17. Well Paid Twice, I think you inherited your Dad’s work ethic, for sure. Again, sorry for your loss.
    For others (not so much you Paid Twice, so skip this) who are now reflecting on their own mortality I wanted to share some of my family’s experiences:
    When my Mom passed away, it was a little nuts. The lawyer said she had a new will, but no one could ever find it. She had bank accounts “hidden” around their home town. She hid the key to her safe deposit box. It was a mess. My Dad was peeved to say the least. Luckily, she had already given away to various family members family heirlooms as she thought appropriate.
    When my Dad, a CPA, passed away, the estate was completely planned, with my oldest brother as executer. He had sent copies of Medical Directives, and various other documents to all of us. Unfortunately, he didn’t talk to us about his wishes. I stuck my copy in the back of a file cabinet without reading it. One night, I got a phone call at 3 AM saying my Dad was critically ill and what should they do? I wasn’t who they should have called, since I really hadn’t talked to him about this, and, well, I live across the country from there. I had no clue. Said go for it, and of course wrung my hands long distance until those closer could get there and find out what was going on. Turns out I was wrong and that’s not what my Dad would have wanted. It lead to quite a bit of misery over the next six months. So, talk to your family. A lot. Legal and financial paperwork was well documented, and once my older brother was involved, it went smoothly. BTW, while my Dad was in the hospital, we were able to contact ALL his credit card companies, etc., and were able to get interest-free extensions for all bills. They were fine with this because my Dad ALWAYS paid off everything completely every month.
    The biggest issue when he passed away, was that he was a hoarder/collector, and that he had decided we should just “fight” over who wanted what from the estate. My brother handled all of this with great wisdom, fairness, and accountability.
    Take care of those you leave behind.

  18. Your Dad was a wise man to have planned so well. I’m very sorry for your loss.

  19. Paid Twice,
    Thank you for sharing from your very trying experience. Your dad really took care of his family. Your list contains good advice for all of us.

  20. I just want to say how sorry I am for your loss and I hope you know that all of your readers, myself included, feel sympathy for you and your family. It must be very difficult for you right now. Sending you support through the blogosphere!

  21. My condolences on your loss. My dad is exactly the same age as yours (as well as as organized and meticulous) and my heart really hurts for you and your mom.

    Just something that might make you think differently about moving money from the 401k … you will certainly KEEP more of the money earned if you carefully check out fees and companies you invest with. 401k’s have more fees to pay (compared to you investing in the same thing on your own) to cover the expenditures incurred in running the 401k plan. Your mom is still fairly young – moving the money and keeping it with the same funds she’ll STILL come out better!

    I would highly suggest using a CFP – I don’t know where the idea comes from that they aren’t knowledgeable on investing, but as someone in the field myself (accounting) I don’t know ANY CFPs that aren’t also able to act as investment advisors and most are also able to sell investments. What I’d watch out for are CFP’s who MOSTLY sell – there are those out there who get the CFP just to entice people in and make more sales – not to educated their clients and look at the whole picture.

    Best of all, I’d find a CFP who could sell AND was a Dave Ramsey proponent. If your CFP doesn’t (as Dave says) “have the heart of a teacher” run hard and fast!

    We’ve recently re-evaluated all our stuff and ended up using American Funds b/c of their long history, reputation for integrity and low fees.

    I’d avoid companies like Waddell and Reed who have forced all their reps to sell a certain amount or they won’t act as their broker dealer any longer. (i.e. I’d avoid a CFP who only sold one companies products!)

    Good luck. Our prayers will be with you.

  22. Thank you for this very valuable advice during a terrible time. I’m printing it out and getting organized.

  23. Someone told me that if your tax-deferred assets are in a mutual fund, you can simply transfer the whole fund from a 401(k) into an IRA, without selling it. In other words, you just pick up the whole instrument and shift it into another holding pen.

    Don’t know, though, whether that applies when the money is being transferred to an heir. She’s probably going to end up owing taxes on it, one way or another.

  24. Just now reading this news as I’ve been way behind on my feed reader. I’m so sorry about the loss of your father. Your family will be in our thoughts and prayers as you continue to grieve his loss. God bless each of you, and let us know if we can do anything from a distance.

  25. So sorry to hear this! I’ve been behind on my blog reading and found this. :( I lost my dad at age 65 some years back and despite our differences, I would give all the money I have for one more day.

  26. I am very sorry for your loss. Thank you for taking the time to share what you are learning through your difficult time.

  27. As the others have said, I am so sorry for your loss. Your father sounds so much like mine. I know whenever that day comes, my situation will mirror yours. Thank you so much for this great and thorough post. I hope things work out OK soon for you guys. Your dad gave you the best parting gift he could…a situation that is easy for your mom and you to work with.
    You have thoughts and prayers going your way.

  28. I, too, lost my stepfather rather unexpectedly (diagnosed with cancer only two weeks before…)last week. I’m so sorry for your loss and completely understand what you’re going through. We, too, were fortunate that my stepfather had previously (actually a couple of years ago when all was well)made a list of bills and in the final week of his life he gave us his usernames and passwords.
    We’re still reeling from the loss, but at least we’re not scrambling to uncover financial stuff.

  29. Condolences on this sad loss. It is a very tough time indeed.

  30. What a wonderful legacy your dad left. Not only his was his family taken care of with life insurance and savings, he left everything in order. So sorry for your loss.

  31. I am sorry to hear about your loss. Before you roll the 401K over to an IRA please review the distribution rules. I believe your mother may be able to access a 401K at 55 without a penalty if she needs the money sooner. If you have it in an IRA you will pay a penalty prior to 59.5. However, please check the rules, I just wanted to make you aware of all your options.

  32. @Hogan – My mom is actually older than my dad, and is 59 already. She will be 59 1/2 in just a few months. So the difference in age on the distribution rules isn’t a factor here. But thanks for your insight!

    I have a call in to my dad’s HR dept to talk more about the 401K issue, but I am currently under the impression my mom has to roll it over to an IRA before she can access it since it is my Dad’s asset as a 401K, not my Mom’s. But I shall find out.

    @Funny – I looked up tax rules about the 401K/IRA thing and as my dad’s spouse and beneficiary, she doesn’t pay taxes on the 401K when rolling it over to an IRA, just on distributions (like my dad would have). If she wasn’t his spouse (if it was me as his kid) it would be a different story.

  33. I am so sorry you are going through this. You are in my thoughts and prayers. Just do what you have to do right now. All your readers will still be here when you get back.

  34. So sorry for your loss. Your father sounds like a wonderful man. Thanks for sharing your lessons.

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