What measures should we take regarding our personal finances when our partner is not financially literate?
If something unforeseen happens to you, a lack of financial literacy in your partner is guaranteed to cause financial turmoil in the family. More and more people are worrying about this, and it instils fear and tension in the family dynamics.
Each of us, proactively or not, uses a variety of financial services.
Of course, for the financial leader in a couple, the variety and number of these financial instruments is much greater, and they’re sometimes much more “hidden”, compared to those of the other partner. You probably don’t want your financially illiterate partner to start tracking down cash and other hidden assets in an effort to understand what you’ve accumulated.
So, the best way to protect your finances if your partner is not financially mature is to take action now. How? Let’s make an action plan for you.
Put your finances in order
List all the assets you possess
The first and most important thing to do is to sit down and list all the assets you have. This action is important not only for your partner but also for yourself.
In our busy daily lives, we often work hard to secure our future, but we don’t always realize what we have already acquired. At some point, we might see that we have much more than we originally thought:
- bank account here, deposit there
- pension fund here, retirement plan there
- life insurance payouts
- stocks or cryptos
Sort the assets into categories
Sorting and categorizing will help you recall assets that you barely remember and would be forgotten even by you, not to mention your partner.
These are the most popular categories:
- liquid assets – these are the assets that you can easily sell or turn into money without losing value
- bank accounts – all your current accounts, savings accounts, deposits
- insurances – life insurances, travel accident insurance
- large assets – here you should think about houses, cars, retro collectible cars, boats, artwork, and furniture
- investments – online trading platforms for bonds, stocks, etc; crypto wallets; equity management solutions
- personal belongings – expensive jewelry, watches.
Double-check whether you have missed important but not-so-obvious assets
The most valuable and overlooked asset you possess might include:
- income tax refunds
- travel accident insurance
- burial plots
- intellectual property rights
- prepaid rent
- utility deposits
- entertainment tickets
- season tickets.
Think of trustees who understand your assets
When you think about a person who could be a trustee, think of a close colleague, friend, or member of your extended family who is familiar with some of your assets and can be trusted. When required, the role of the trustee will be to help your loved ones locate and claim a particular asset, e.g., your stock options in an asset management platform.
List all the trustees you can think of
List all the trustees you can think of and assign them to the assets which they can help your loved ones to claim.
Make the action plan a reality
As a beloved partner who is trying to protect your assets and loved ones, you should consider making your action plan a reality. To avoid any mistakes that could jeopardize your action plan, you need to ensure that it fulfils the following three simple requirements:
- the steps to be taken in your action plan are complete
- the data needed has been entered in the right place in the right way
- your data and instructions are correctly linked to your loved ones and your trustees.
How do you make your action plan a reality?
The best way to do that is simply by using a contemporary digital legacy servicе.
Digital legacy services are designed to ensure that people like you can easily protect their assets and loved ones, even if their partner is not financially literate.
They are meant to be intuitive to use, easy to fill in, secure and reliable.
They don’t rely on your partner’s financial literacy. The only thing that you need to do is to subscribe to a digital legacy service such as DGLegacy, fill in the data you want to protect and the people you have nominated, and sit back and relax. The digital legacy service will take care of the rest.
How do the best digital legacy services work?
They give you the right tool to catalog and protect your assets and passwords.
They make sure that you can easily designate beneficiaries and trustees to your assets and passwords.
Digital legacy services like DGLegacy ensure that in the case of an unforeseen event happening to you, they will proactively inform your beneficiaries and trustees about the assets you assigned to them.
Whether you take advantage of our advice and whether it benefits you at all, it is important that you do not miss the opportunity to take the first step to protect your finances now, even if your partner is not financially literate.
Protect the finances you have now so that you do not regret, at some future moment, that you failed to anticipate the situation.