Don’t leave your loved ones in the dark.

 

 

Involving your children and heirs in your finances well in advance of your eventual passing or a devastating health crisis is imperative. Unfortunately, most of us unconsciously put it off.  Why? I would suggest two possibilities.  One, this is an uncomfortable topic that deals with many thorny issues. Two, it takes plenty of time and effort to organize your finances.  However, no matter how awkward it may be to discuss or how much work is involved, we must make an attempt to educate our children and heirs about our financial matters. If we don’t get them involved ahead of time we may force them into the role of playing financial detective when an unexpected health crisis occurs.  When the time comes it will be hard enough for them to cope with the emotional aspect of a health crisis let alone trying to deal with the financial aspect.  Seeing a parent or loved one suffering from a chronic illness or going through a morning period is on its own more than enough for most people to handle.  Stress reaches a whole new level when one is forced into looking for insurance policies, wills, and financial statements.  This all can be avoided with the proper planning. 

 

Focusing on the following areas will help you get started:

 

Gather key personal records. Locating and maintaining essential personal documents are a must. Marriage, birth, employment, social security, and military records should be secured. It’s also a good idea to keep on file past income tax returns for both federal and state as well as any records of gift taxes being filed. Full legal names and social security numbers should be noted. Wills and trust documents should be reviewed and updated if necessary.  Records of completed transactions such as property settlements and divorce decrees should also be set aside. It wouldn’t hurt to have a complete list of all professionals you work with such as lawyers, financial planners, brokers, accountants as well as how to contact them in case of an emergency.

 

Put together a financial inventory. Work on creating an inventory of all of your assets and liabilities.  Keeping good records of these items is critical.  While your composing your list it wouldn’t be a bad idea to find the purchase price and the date of purchase for any investments they have made.  Key items to look for would be: bank statements for checking and savings, brokerage statements, retirement accounts statements, pension statements, stock certificates and their location, records of ownership of real estate, safety deposit box information, listing of personal valuables like jewelry and artwork, property and casualty insurances, life and long term care policies, promissory notes, mortgage information, personal loans, and credit cards statements.

 

Address key financial planning issues.  I’d like to stress the importance of having an updated will.  I’ve seen many situations where wills haven’t been updated for years and sometimes decades.  As the years pass obviously many changes will occur in your family.  Kids will marry and have children.  New properties may be acquired.  Some of your heirs may have more needs than others especially in the case of mental or physical disabilities.  There’s always the possibility that a family trust may need to be constructed to prevent the squandering of your estate or to provide and care for those that are “special needs”. Furthermore, it is imperative that you address your need for durable powers of attorney for health care as well as property.  Also write down your preferences for funeral arrangements, assisted care facilities, and how these costs will be paid for.

 

 

Jon Flynn is a Certified Financial Planner ^TM and owner of Flynn Financial in Eynon. He is a Representative of Securities America, Inc., Member FINRA/SIPC and of Securities America Advisors, Inc. Flynn Financial and Securities America are unaffiliated.   Mr. Flynn can be reached at 570-876-5015.