Making critical financial or health care choices now, can ensure you and your loved ones know what to do and when, and have essential information when it’s needed most.
Facing a sudden disability, illness, or the end of one's life is an eventuality few of us think about until it's too late. There are many ways you or your spouse can end up unavailable to make critical financial or healthcare choices for yourself or your loved ones. Without a plan in place, family is left scrambling to find documents and make decisions on your behalf that may not reflect your wishes.
Below are 8 steps to help you plan for what is difficult, while it’s easy:
Creating an Estate Plan – If you don’t have an estate plan, you should consider creating one. There are two main reasons why people need an estate plan;
To protect minor beneficiaries, or;
To protect adult beneficiaries from bad decisions, outside influences, creditor problems, and divorcing spouses.
An estate planning attorney or service can help you create a few essential elements of this plan. There are 4 main elements to every estate plan. These include a Power of Attorney (POA), a will or living will, advance healthcare directives, and/or a Trust. A trust can be useful to avoid probate (probate is essentially the process of lawyers determining who gets what after death) and manage your estate both during your life, and after you are gone. What’s most important to think about, is who you will choose to be your guardian for health, personal financial matters if you can no longer do these things independently. Your estate plan is the guide for that person. The fiduciary you choose does not have to be an actual attorney, but they will have a lot of control over your finances, so it’s crucial that you trust him or her completely.
Choosing Your Person – As mentioned above, when naming someone to be your fiduciary, it is important to be able to trust this individual. This is why people often name family members or friends. However, problems can arise because oftentimes they find it difficult to be completely objective. Disagreements can happen over many things, including how long the estate should take to complete, the selling of assets, and the division of personal property. Family may not always communicate very well with each other. When one family member is named, problems between family members can arise surprisingly frequently. However, we usually recommend only one (competent) person in order to avoid delays and conflicts arising from 2 people being co-trustees.
If you do not know anyone, an alternative is to hire a professional fiduciary to handle your estate. A professional fiduciary can be a bank with trust powers, attorneys, a certified public accountant, certified financial planner, or a trust company. The attorney who is drafting your estate planning documents can recommend a trusted resource in your area. Some may choose to name joint trustees that include one family member (to be your personal advocate) and the other a private fiduciary or corporate trustee.
Complete an Advance Health Care Directive – This document lets your physician, family, and friends know what your health care preferences are, including the types of special treatment you want or don't want at the end of your life, your desire for diagnostic testing, surgical procedures, resuscitation and organ donation. It also helps you list out your healthcare service providers and contact information. You can download a free, four-page directive here, and name those who you want to make health care decisions on your behalf if the time comes.
Documenting Your wishes - The above 3 steps provide a good outline of everything your loved ones will need to handle things on your behalf, but the next set of information will help guide them on how you want things handled in the event of your incapacitation or death. Would you want to be an organ donor? Do you have any preferences with regards to the type of services they arrange, or any special requests? Download this free form to outline your wishes. Complete the parts that matter to you and tell your family and friends about it.
Letters to your loved ones – Preparing a message for your loved ones while your healthy can help with their grief process. Write about how you feel about them, times that were meaningful in your life and the moments with them that made it precious.
Identify Your Preferred Care Facilities - Making sure you have contacts for caregivers and are aware of available care facilities ahead of time so that this does not turn into an outright emergency. We frequently see family or friends scrambling to find help and/or housing in a hurry. This can lead to hasty, and usually poor decisions. Spending a little time up front can help facilitate a smoother transition into a care facility or hiring assistance if the time comes.
Pulling it All Together! Sounds simple enough, right? Although it may take some time, this step starts with gathering and securing all of your important documents and information (some of which we covered above) in one place. Create a file or a notebook at home which includes the following:
Contacts – List contact information for your selected personal advocate, service professionals, such as your estate attorney, executor, financial advisor, accountant, etc. This information will allow your loved ones to reach out and notify them so that they can take any necessary next steps.
Important documents - such as marriage certificates, birth certificate, your estate plan, will, living will, trust, power of attorney (if one exists), insurance policies, certificates of title, tax documents, etc.
Accounts and Budget – List all of your banks, credit cards and debts, including debts that may be owed to you. This should include account numbers and contact information for each. This can be in the form of a budget that outlines recurring bills that you pay (including amounts, and when they are due) so that these payments can be set up to continue or be canceled as appropriate.
Retirement Plans – In another section, list your retirement accounts, banks brokerage accounts, or pension plans. If you have a financial advisor, they will have all of this information as well, so be sure to also include their contact information.
Secured Places and Passwords - Now that you have your contacts and documents in order, decide where you want to secure this sensitive information and make sure your loved ones know where to find it. This can be in a locked dresser or file cabinet at home. If you choose to place everything in a safe deposit box, keep copies or a summary of what’s included at home and check it annually to ensure it remains up to date. In addition, create a list of online accounts with passwords, combination locks, access codes, keys, safe deposit boxes.
We know this is a lot to consider and it will take time to put together. However, the decisions you make now will ensure you and your family have what is needed when it counts the most.
About Aspire
Aspire Planning Associates was founded to help you and your family achieve everything you aspire to. That means we go beyond a traditional advisor’s focus on investment management to emphasize comprehensive financial planning that organizes all the disparate parts of your wealth, including real estate, compensation plans, taxes, and retirement. Because your dreams will take time to realize, we are committed to working with you over the long term, giving you confidence that you will reach your destination. If you have any questions, don’t hesitate to reach out. In the meantime, we wish you and yours all the best!
