In my opinion, there is nothing more difficult to accomplish during a time of intense stress than trying to put finances in order. The stress that I’m referring to in this instance is the death or disability of a loved one. Perhaps you’re a spouse who has lost a partner, a child who has lost a parent, or a dear friend trying to pick up the pieces of a life.
Over the years, we all tend to accumulate things – financial assets, property such as our home, vehicles, jewelry – just stuff. We also may have plans for those assets to pass on to our loved ones or to a charity (or we may not).
The difficulty comes when we have not communicated our desires for the distribution and use of these things upon our death, or if we become unable to manage them. Worse than that, there may not be even a record of some of these assets, except in our own head! How can a beneficiary make a claim against a life insurance policy, close a bank account or use assets for our care, if they are not aware of its existence?
One place to start is to meet with an attorney to prepare a Will, Power of Attorney, and a Health Care Proxy. Ask a friend, (or your Financial Advisor – I’m sure he or she would be happy to give you a referral) for the name of an attorney. The Attorney will work with you to ensure that your assets are listed and your wishes for your beneficiaries are in writing, in your Will. They will also work with you to prepare a “Power of Attorney”, which is an important document that authorizes another person(s) to act on your behalf in financial matters if you become unable to do so. A Health Care Proxy gives your agent authorization to speak on your behalf regarding medical decisions if you are incapacitated. Make sure that this person(s) is aware of and will abide by your wishes.
Next, take an inventory of all of your financial accounts (checking, savings, credit union, credit cards) write them down, and keep this in a safe place. This could be a safety deposit box, safe, or with a trusted friend. Note the phone numbers of your trusted contacts – your banker, Financial Advisor, Tax Accountant, Attorney, Spiritual Advisor – any and all people who should be contacted upon your death or in the event you are disabled.
Taking these steps will make it easier on the people who you have trusted to handle your affairs, and it may also give you peace of mind. Remember, failing to plan is a plan in and of itself! If you don’t have clear directions, your state and/or the courts may be the ones to make decisions on your behalf.