Ray’s Take You may believe your financial records are fairly well organized. However, you could unwittingly be leaving your loved ones a big mess. No one likes to dwell on dying, but one day we’ll all “make the switch,” and a little planning can greatly ease the pain for those left behind.
All families need to have certain legal documents in order. These include a valid and regularly reviewed will, a living will and an official assignment of power of attorney for both health care issues and finances – which can be two different individuals.
In addition, all financial records should be summarized and easily accessible, including Social Security numbers, insurance policies, brokerage and bank accounts, and loan and credit card information. If a lot of this is computerized and password protected, have a written record of that information as well. You need to let someone know you have a lock box, where it is and where the key is kept.
Then let someone know where everything is and how it is organized, preferably the qualified person you selected as executor of your estate and/or power of attorney. Plus, tell your heirs what to expect in clear language. Your death will be shock enough for them to deal with at the time.
It’s important to keep the various beneficiaries of different financial instruments updated, too. If an ex-spouse is listed as a beneficiary, that person will still benefit even if you have remarried. Beneficiary designations on insurance, annuities, and retirement plans trumps whatever your will says every time.
If it all sounds a little confusing to you now, imagine how your family and friends will feel when they are have to deal with a financial mess on top of their grief. Get the advice of an estate attorney or financial adviser. A few hours invested now will protect your loved ones from many troubles later.
Dana’s Take Our 12-year-old son has been asking us lately, “How much money do you have?” Discussing family finances is not appropriate at his age, but when is the right time? Once the child is an adult, both sides can feel pretty uncomfortable talking about emotionally loaded topics like illness, death and inheritance.
Consider retaining a Certified Financial Planner to look over your finances and discuss your future. After that, call a family meeting with the financial planner present to go over insurance coverage, care options, and future financial needs or distributions.
Such a meeting gives heirs a chance to ask questions and address issues that might be important to them, yet overlooked by you. Inviting a professional to join the conversation can help everyone prepare for the future.
No one likes to talk about change and loss but maintaining silence could result in bad feelings and family fractures instead of the memories you would rather leave behind.
Ray Brandon is a certified financial planner and CEO of Brandon Financial Planning (www.brandonplanning.com). His wife, Dana, has a bachelor’s degree in finance and is a licensed clinical social worker. Contact Ray Brandon at firstname.lastname@example.org.