Finish Strong. Run through the tape. End with a bang not a whimper.

All these phrases speak to giving maximum effort to finish a task. It is a noble idea but thousands of people, mostly men, are failing to finish strong and tarnishing what would otherwise be a nice legacy.

Several times a year we meet with a newly widowed woman of a retirement-aged man. All are stressed but some are panicked because they have no clue how to manage their finances. They are not dumb or incapable. They were simply not engaged with such matters.

The set up for this is quite common. The husband handles the money or, handles the “investment” end of things while the wife oversees the household expenses like groceries, lawn care and the like.

Most relationships settle into a division of labor in various ways. Both spouses don’t need to do every chore jointly whether that be vacuuming the house, servicing a car or paying bills. By splitting responsibilities, more things can get done more often. It can be quite efficient. Malicious intent is rare.

There is nothing wrong with this arrangement, until there is something wrong with it.

For many couples, it goes wrong when one of them starts to show their age.

Whether it is a decline in cognitive function, debilitating health issues or a sudden death, if the couple doesn’t have a plan, the survivor is left scrambling.

There is an opportunity to help prevent this from happening when working with young couples. They can be more purposeful about the division of labor and communications about what the other is doing if they are aware of the issue.

It turns out there is very little forethought into the matter of who will do what.

At the 2018 Academic research Colloquium for Financial Planning and Related Disciplines put on by the CFP Board’s Center for Financial Planning, Dr. John Lynch of the Leeds School at the University of Colorado discussed some new research co-authored with Adrian Ward at the McCombs School of Business at the University of Texas at Austin. Their paper, “On a Need-to-Know Basis: How the Distribution of Responsibility Between Couples Shapes Financial Literacy and Outcomes” showed that the division of labor often had little to do with the respective financial literacy of the participants.

The study looked at how couples split the financial responsibilities (50/50, all her, all him, etc.) and the length of service in the household CFO role (HCFO). If the split is not 50/50, the literacy of the non-HCFO spouse declines over time while the literacy of the HCFO increases significantly. In 50/50 splits, the HCFO’s literacy only increases slightly.

The literacy measurements of the parties in each couple were nearly identical at the start when the divisions were determined. Even inside of 5 years from the initial division, the differences were not significant. It takes time for the literacy gap to develop. The more successful the division of labor and the longer the marriage lasts, the bigger the difference and the bigger the potential problem.

So how do couples decide who does what? The decision to divvy up responsibility is made intuitively. Interestingly, early in the relationship, who gets what role is largely determined based on competence in other “domains.” In fact, many HCFOs become such because they are bad at other stuff.

One spouse might say something like, “You aren’t very good at taking care of the dog, so I’ll do that, and you take on the finances.” And with that, the HCFO is appointed.

Why do so many of the newly widowed know so little about money? Why don’t they learn? In many cases, it is because when one in the couple has the finances covered, the other lets it go, creating a gap in financial literacy and competence.

This can cause problems prior to the incapacity of the HCFO. The study shows that when confronted with an issue, non-CFOs tend to avoid searching for information when the HCFO is not available. This results in a tendency to make poorer decisions because they don’t know as much and are less likely to bone up on the topic.

The good news is the gap is not insurmountable. Research by Joanne Hsu, a Federal Reserve economist, indicates the gap can be closed and often is when signs of cognitive decline arise in the HCFO. The non-HCFO engages and increases the literacy level.

Hsu also finds that many non-HCFO women seek greater literacy even in the absence of cognitive decline in their HCFO husband as he approaches an age at which she foresees her widowhood. Nonetheless, for many the decline or the recognition of the HCFO’s mortality comes too quickly, leaving a stressed and vulnerable survivor.

As mentioned earlier, these findings suggest that there can be value in helping new couples become aware of these gaps and manage them throughout their relationships. However, most of my clients are retired or are about to be and have been married a long time. The gap between their respective literacy levels is often significant.

Obviously, one preventive measure is to narrow the gap. This involves getting the less engaged spouse to be more active in the conversations about the areas of the family’s finances with which they are less familiar.

This should not be a crash course in personal finance. To start, the less-involved spouse needs only to engage in the high-level strategic discussions. If the more-involved spouse brings up earnings reports, slow him down. There is no need for that.  Nor is there a need for anyone to watch business news.

They do need to be able to describe who they want their money to provide for and when. From there, a good financial planner can help them learn what they need to learn and take on tasks that can be delegated.

I have found this is not terribly difficult to accomplish if approached one small step at a time, accompanied by a healthy amount of encouragement, and taken at whatever pace the couple desires. It works best if time is spent up front talking about the ultimate end goal which should be to assure whoever is widowed is set up to succeed.

Sure. Now and then, the less-involved spouse wants to be really involved and will take on the quest for knowledge with great zeal. They want the crash course. But, that is unusual.

In fact, I’ve seen far more cases in which there is little or no desire from either spouse to close the gap. After all, the division of labor has worked just fine for many years. The involved spouse is used to being involved, the uninvolved spouse is used to delegating to the HCFO and if they are happy, who are we to say they should change?

Well, we are financial planners and if we don’t get them to truly consider preparing for a common change that can be thrust upon them, we are failing them.

When they aren’t prepared, and the less-involved spouse suddenly must handle decisions and things they are not equipped to handle, they are more apt to make bad choices or get ripped off. The involved spouse that is so often proud of their ability to handle their affairs ends up leaving behind a surviving spouse that is sadder, more confused, vulnerable, and often financially unsecure. In some cases, decades of a good marriage become tainted and the survivor goes forward harboring anger not fondness.

When they are prepared, widowhood is still brutal but worries about money are reduced. I have heard many widows over the years say they are so glad their deceased husbands thought enough to have their affairs in order.  

The presence of a competent, ethical financial planner can be the difference between leaving a legacy of thoughtfulness and love or one of stress and anger. Talk to your clients about who will be doing what when the usual way can’t work anymore. Help your clients be remembered in positive ways.

Dan Moisand, CFP, has been featured as one of America’s top independent financial advisors by Financial Planning, Financial Advisor, Investment Advisor, Investment News, Journal of Financial Planning, Accounting Today, Research, Wealth Manager and Worth magazines. He practices in Melbourne, Fla. You can reach him at www.moisandfitzgerald.com.