The world turned upside down 10 years ago for Chanel Reynolds, a Seattle-based digital strategist, when her husband José Hernando, then 43, died in the hospital, a week after a bicycle accident. But the tumult involved far more than becoming a widow with a young son and a stepdaughter.
Reynolds quickly learned she was wholly unprepared financially. Her education and mistakes led Reynolds to write the new, powerful, helpful and utterly frank personal-finance book, What Matters Most. It’s the best book on financial preparedness that I’ve read.
Life’s Big ‘What-Ifs’
In her book, subtitled The Get Your Sh*t Together Guide to Wills, Money, Insurance, and Life’s ‘What-Ifs,’ Reynolds tells readers what she wish she’d known before her husband died and what all of us need to know. Because, as Reynolds told me when I interviewed her for Next Avenue, none of us knows if or when we will be forced to confront one of life’s big “What Ifs.” (For an eye-opening example of what happens when you die without a will, read the devastating Bloomberg BusinessWeek story, “The Mystery of the Millionaire Hermit.”)
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Through the book, the Get Your Sh*t Together website she founded and the GYST.com site she co-founded, Reynolds is on a mission to help us all avoid being unprepared to deal with life’s emergencies. Without having at least a modest understanding of insurance and preparing basic estate planning documents as well as advance directives (letting others we appoint make decisions for our health and money if we can’t), Reynolds believes, we’re dooming ourselves and our loved ones to unnecessary anguish and chaos. Sadly, many Americans have done little preparation for life’s big “What Ifs.” As Merrill Lynch recently noted in its report, Wealth Planning for Shortened Life Expectancies and Senior Family Members, only one in three U.S. adults have a health care proxy or living will.
Here are highlights from my conversation with Reynolds about how to prepare for life’s big “What Ifs:”
Next Avenue: Why did you want to write this book and who is it for?
Chanel Reynolds: I never wanted to write this book. I wound up writing it by accident. Thinking back on those first days in the hospital with my husband after his accident, as the days went on, I had so many questions: What were my husband’s passwords? And there were the questions from the hospital staff like: What insurance do you have? Do you have your affairs in order?
I knew financially we were not in a good spot. There was a growing pile of things I didn’t know or had done only half way. And I thought if that was happening to our family and we had two incomes and my husband and I were both college educated, with careers in creative, tech fields… if we were screwed, it felt to me that everybody else was way more screwed than we were.
The book is part memoir and part ‘here’s all the things I learned and wish I had done.’ I couldn’t not write it.
What did you most wish you knew, and had done, about money before your husband’s accident?
I think one of the things I realized when I was at the hospital was we didn’t have an emergency fund. We had picked and poked at it for a few years. I was grateful that some of my friends and family could float me. It was four to six weeks before the life insurance check came.
A lot of people don’t have four to six weeks, as we know from the government shutdown. Experts recommend having six months’ worth of expenses in an emergency fund, but a majority of people don’t.
And you didn’t know what insurance you had?
Did we have disability insurance? I didn’t know. I knew I didn’t as a freelancer; I had no idea if my husband checked the box on his form.
We had life insurance, but we hadn’t updated it in five years. The life insurance we had was lifesaving for me, but it wasn’t enough.
What do you wish your husband and you had talked about more?
The things I didn’t know! God, I sound like the wife who lets her husband do all the money things. But that wasn’t the case at all. I handled half of our finances.
Looking back, I don’t feel I was totally uninformed about our finances, but we didn’t have an inventory with everything in one place and everything added up so we could see how things looked cumulatively.
It’s not just: Do you have life insurance? It’s: What kind? And if something happens, what does it mean?
How did the accident and your husband’s death affect your finances? Could any of that have been prevented?
I think about that all the time. That’s a great question.
I would love to have a time machine and have had the chance to have everything done right — even the basic stuff like having emergency contact information as part of a financial plan and a roundup of all our accounts.
I would’ve burned less time when I should have been in the room with José, not in the hallways two floors up trying to get cell reception and guess the password in his phone.
How did having life insurance help?
I was able to take a year off. Had I not been able to spend that time to focus on my kids, I wouldn’t have fared as well.
You say emergency planning starts with three things: emergency contacts on a cell phone; an ‘in case of emergency plan’ with your family and what you call ‘your choice.’ Can you talk about each of these?
Having emergency contacts on your phones [yours and your spouse or partner’s] is good. But if you can’t get into your loved one’s phone, it’s good to have the information at home, maybe on a chalkboard. Just something that’s easily accessible.
The ‘in case of emergency plan’ is almost like the emergency preparedness kit we’re told to have in Seattle in case of an earthquake. Many of the tips and lists in that kind of kit are good to have.
And the ‘your choice’ — When you Google ‘What to do when someone dies,’ lists come up from specific narratives. My husband died when I was 39, so a lot of the lists I saw didn’t apply to me because I wasn’t 59 or 69. We all lead different lives. So think about your priorities.
What happened in the hospital that could have been prevented if you had done some advance planning?
We had an advance care directive, so I could make decisions on his behalf. It was easy on me because the choice due to the accident was almost made for me: his injuries were unrecoverable; both his brain and body weren’t going to be able to come back. [She removed her husband from medical support a week after the accident.]
You should have an advance directive and sign it and, as I explain in the book, it should be really, really direct: ‘I don’t want to be on a ventilator… here’s what a ‘meaningful quality of life’ would be for me…here’s what I want and what I definitely don’t want.’
And figure out who you want as the decision maker for medical power of attorney. Often, people put down their spouse. But I talked to a lot of people for the book who said: ‘God, no, my spouse would be an emotional wreck! No way!’ You want somebody who would be able to carry out the wishes and instructions on your behalf. And you want to give the person enough information so they feel confident they were relaying your instructions and not guessing.
What’s your advice about wills and trusts?
Half of us don’t have wills. But there are now many easy free and low-cost options to have a will drawn up. Without a will, it could mean that exactly the opposite of what you would like to happen will happen after you die. It takes literally one hour to write the basic stuff down.
If you can afford an attorney, you should absolutely get one. I can floss my teeth, but I’m not giving myself a root canal.
When should you update your will?
I do an annual exam, just like I get an annual mammogram around my birthday. And you should also update it when major life events happen, like a marriage, a divorce or the birth of a child. But I’d say most certainly you should look into updating your will every three to five years. Once you’ve made a will, updating it doesn’t take much time at all.
You don’t have to go somewhere to get a will legally notarized; that’s the step where people get stuck. They have an unsigned will. But you can hire a mobile notary to come over and sign it or there might be a notary where you work or at the library.
Where should people keep their important documents like wills and advance directives?
Keep the original in a safe place and a backup somewhere else, preferably with one or two people named in the documents.
You can keep the original in a fireproof safe in your house if someone has the combination and knows how to get to it. I have my originals in a binder in my house, in an easy-to-find place.
You finish the book with sections on what you call ‘Life Do-Over.’ What does that mean and what’s your advice about it?
I thought a lot about that. I was halfway through what I thought was going to be a long and happy life and then a giant invisible whistle blew at all of my plans. I was forced to reassess everything.
José used to say: ‘You don’t have to do anything you don’t want to do’ and I thought, ‘How can you possibly say that?’ I have to do some things I don’t want to do. But now, I think about that and I think he was right.
I don’t want to spend the next 30 or 40 years doing a lot of things that are not important to me. And I don’t know if I didn’t have my giant do-over if I would have had such an in-your-face lesson.