October 24, 2023

The Risks of Transactive Memory

I was listening to a back episode of Malcolm Gladwell’s Revisionist History podcast recently in which he explores the idea of "transactive memory." In it, he says:

“We don’t just store information in our minds. We store them in the minds of people we love. You don’t have to remember the emotional relationship of your child to her teacher because your spouse will. You don’t have to remember how to work the remote because your daughter will. That’s transactive memory. Little bits of ourselves reside in other people’s minds.

You know when one half of a marriage dies and the surviving partner says some part of them died along with their spouse? [Harvard Psychology Professor Dr Daniel] Wegner has a heartbreaking riff about how that is actually true. When your partner dies, everything that you have stored in your partner’s mind dies along with them.”

This passage reminded me of conversations I hear among our Leith Wheeler portfolio managers who work with families. The grieving, surviving spouse too often has the stress of that loss compounded by the realization that things that resided in their wife or husband's mind - bank account details, grocery store loyalty card numbers, how their investment portfolio is structured, have passed along with them.

Cindy Huang, CFA, Principal, Portfolio Manager – Private Clients & Foundations says that while some families are proactive in including everyone, this can still be an issue. “People often don’t think about the smaller details until it’s too late,” she says.

To help reduce your reliance on transactive memory, there are a few things you can do:

Attend portfolio review meetings together with your portfolio manager. Gaining a broad understanding of where, how, and why your money is invested the way it is, will provide some comfort when circumstances change. It also helps to already have a relationship with your portfolio manager so you can trust your affairs are being managed responsibly while you adapt to your new reality.

Be curious. Not everyone has to be an expert on the markets, but it’s helpful to try to maintain a mindset of curiosity – and be patient with yourself while you climb the curve. Ask questions in those review meetings, attend educational sessions, and read the articles like this one and talk to your spouse about it. (Note we publish regularly on this Insights blog, and also distribute longer quarterly articles about the markets and planning to our clients. They can be found here.)

Do an estate planning inventory. While it may seem a morbid task, it’s worthwhile spending the time to identify the little things that may live only in your spouse’s mind while you’re both healthy. Here are some things you could map out and where there are gaps in knowledge, fill in for one another:

• Banking details – numbers, contacts, access rights for accounts, credit cards, mortgages, other loans
• Insurance - Life, long-term disability documentation
• Accounting, Legal – like your investment manager, it’s important a surviving family member has a relationship with your other professionals
• Vehicle – where/when it’s serviced, with whom, insurance coverages, lease terms
• Home – any strata info, property tax amounts, payment options, timing
• Utilities – amount and timing, how/where it’s paid, cell phone contracts (ensure can be cancelled)
• Auto-pay arrangements on credit/debit cards – amounts and timing for full list which likely includes everything from streaming services to data storage fees to cell phone bills
• Online accesses – banking sites, investment accounts, social media accounts, digital photograph storage, and the like
• Many more… For worksheet with a full inventory, check out the link below.

Reducing transactive memory in your relationship can be an important planning tool so consider including both partners in your investment discussions – it can prove a kindness to the surviving spouse in the end.