Change is a constant in life. It happens every day. Small changes, like construction, require you to alter your commute to work. Or maybe you get offered tickets to tonight’s baseball game, and you rearrange your plans. Changes like these are easy for us because we are familiar with making small changes every day. But how prepared are we for a big life change?
Estate planning and insurance is often a “big change” that people are uncomfortable addressing because its focus is planning for a life beyond our own. We are faced with thinking about our own mortality. The absence of a plan can put extraordinary stress on your spouse and loved ones during a time of grieving, and that can be amplified if your spouse has never handled the family finances. So, how can we take the first step in becoming better prepared for the unexpected?
1. ORGANIZE A FAMILY MEETING.
Have your own family “State of the Union” at least once during the year. This will bring spouses into the financial planning picture who have otherwise not been involved. It is a great time to outline your financial goals for the year. Also, go over financial housekeeping items so that your spouse would feel comfortable if they had to take control of these issues.
• Share investment and banking account statements – names of institutions, current balances and titling
• Review outstanding debts -How are they currently getting paid, and what is the payoff time frame?
• Organize insurance documents – death benefit, annual premiums, insurance carrier and copy of policies
• Prepare estate documents – make copies of wills and any power of attorney paperwork
• Technology – Do you access financial information online, and if so, does your spouse have access?
2. CONSULT WITH AN ATTORNEY.
Develop your estate plan with an attorney. Having the necessary legal documents in places will ensure your assets are transferred in a timely manner as desired. It will also allow loved ones to make medical and financial decisions on your behalf and gain access to the financial accounts so that your financial needs continue to be supported.
3. REVIEW YOUR PLAN.
Revisit your estate plan on a regular basis and especially when a life event change happens. This would encompass marriage, children being born, net worth appreciation and divorce, just to name a few. Your estate plan may get more detailed or simplified as life changes, and a regular review of your plan will help keep proper documents in place.
4. MEET WITH YOUR FINANCIAL ADVISOR.
Finally, continue to discuss your financial goals and estate plan with your wealth advisor. Your wealth advisor is here to help keep you on track to meet your goals, work with your other trusted professionals and help guide you through all financial decisions. The synergy of your team will help allow you to focus on your family and less on your finances as change happens over time.