As the new year continues to unfold, many of us find ourselves contemplating resolutions that often revolve around diet, exercise, and personal growth. Yet, amidst the pursuit of physical and mental well-being, there’s a resolution that may not immediately cross our minds but holds equal, if not more, importance – planning for the unexpected when it comes to our family and loved ones.
Allow me to share an emotional story that hits close to home. Recently, a colleague and dear friend of mine experienced the sudden loss of his brother. The unexpected departure left my associate grappling with grief, compounded by the realization that there was little in the way of planning or directives left by his brother. This unfortunate experience serves as a stark reminder of the crucial importance of having a plan in place for life’s inevitable “what ifs.”
It’s not just about financial preparedness; it’s about ensuring that our loved ones are taken care of in the best way possible. One critical aspect of this planning involves addressing how your spouse, children, and assets are cared for if you’re no longer here. Simple steps, such as establishing survivorship or transfer-on-death deeds and listing someone on your banking accounts, may seem small but can make a significant difference in times of crisis.
In a world where cybersecurity is paramount, sharing passwords may seem risky. However, utilizing secure password management tools like Bitwarden, 1Password, or Keeper Security and then sharing a single password with trusted individuals is a practical solution to extend access to important accounts. Moreover, maintaining a list of important contacts, accounts, and automatic withdrawals is equally important, ensuring they can be managed or halted as needed.
As we conclude the month of February, which is recognized as “Insure Your Love” month, it’s an opportune time to review these often-neglected details. Don’t overlook beneficiaries on retirement accounts and life insurance through your employer – crucial aspects that may need updating based on changes in your life, such as new births, increased living costs, or additional financial obligations.
Life insurance is another key consideration. Circumstances change, and what was once sufficient coverage may no longer meet the needs of your growing family or evolving financial situation. Regularly reviewing and adjusting your life insurance is a responsible practice that ensures your family’s financial security.
Furthermore, unforeseen health challenges can strike at any time, rendering us incapable of making decisions. Having powers of attorney in place, designating a trusted friend or relative to make decisions on your behalf, is a crucial element of comprehensive planning.
Now, let’s delve into the essentials of advance planning to put your financial house in order, regardless of your life or wealth situation.
Create a Financial Emergency and Continuity Plan
Work with your financial institutions, life and property insurance agent, attorney, and financial advisor or broker to develop a plan that mitigates risks to your income, standard of living, goals, wealth, and legacy. This plan should encompass investment strategies, risk management, and titling/ownership structures.
Formulate an Estate Plan
A well-crafted estate plan goes beyond distributing assets. It allows you to convey your wisdom, insight, and values. Elements of an estate plan include creating a will, updating beneficiaries, establishing durable powers of attorney for financial and healthcare matters, and having a living will/advance healthcare directive.
Consider Establishing a Trust
A trust provides a mechanism to manage and distribute assets according to your conditions, avoiding probate and potentially reducing taxes. It can offer better protection for your estate’s privacy.
Plan Your Legacy
Seize the opportunity to pass on your wisdom and values to future generations or support causes close to your heart. This can be done using vehicles such as life insurance.
Don’t ignore the importance of planning for your family’s future. Enlist the help of your financial, insurance, and legal advisors to navigate the complexities of estate planning. By taking these steps, you’re not only safeguarding your family but also ensuring your financial objectives stay on track, even in the face of life’s uncertainties. Don’t put off planning—your family’s peace of mind is worth the investment.
DISCLAIMER
The content provided in this article is for informational purposes only and is based on the author’s opinion. It is not intended as legal advice, and readers are advised to seek professional legal counsel for specific legal matters.
The author of this article is not a legal professional, and the information presented should not be considered a substitute for legal advice from qualified professionals. Laws and regulations vary by jurisdiction, and legal interpretations can change over time. Therefore, it is crucial to consult with a licensed attorney to obtain accurate and up-to-date legal guidance tailored to your individual circumstances.
The opinions expressed in this article are those of the author and do not necessarily reflect the views of any organization, institution, or individual associated with the author. The author does not assume any responsibility for errors, omissions, or inaccuracies in the content or for any actions taken in reliance on the information provided.
Readers are encouraged to independently verify the information presented and to consult with legal and/or financial professionals for advice specific to their situation. Reliance on any information provided in this article is at the reader’s own risk.
This disclaimer serves as a clear notification that the content is opinion-based and informational in nature and should not be construed as legal advice. It aims to promote a responsible and informed approach to financial and legal matters.