My mom used to tell me that a job begun is a job half done. That expression is especially true when it comes to putting together an estate plan and getting your affairs in order. Statistics indicate a majority of American’s do not have an estate plan in place. If you are at or nearing retirement or if you are someone who will ultimately be responsible for an aging parent, here are the first two easy steps I recommend you take to get started.
First: Where’s the Money
Put together a list of what you own. This may sound simple, but don’t test your family’s ability to embrace their inner Sherlock Holmes and figure out what you own from the clues you’ve left behind. Putting together a list of every asset and insurance policy you own is a great way to get started. This simple step can save loved ones countless time and effort when left to try and piece together what needs to be done if you are no longer able to do so yourself.
To start, make a list of all of your bank or financial accounts, investment accounts and insurance policies. Don’t worry about the details just get started. After you have an initial draft of the list, go back and add as much detail as you can, including the account and/or policy numbers and account balances. Then contact each company and request a printout of the account detail, which should include how the account is titled and any beneficiary or payable on death designations. Don’t rely on your memory for such information, especially if you haven’t verified these details recently or if there has been any major change in your life, such as the death of a family member. Finally, list the contact information for any investment advisor, insurance agent, attorney or CPA familiar with your accounts and your financial situation.
Second: Who’s the Agent
A power of attorney is a document in which you appoint someone as your agent to make decisions for you, if at some time in your life you are unable to do so yourself. There are basically two separate types of power of attorney documents you should have; a healthcare power of attorney and a financial power of attorney. Without a healthcare and financial power of attorney, your family will not be able to make decisions for you during periods of incapacity unless a court appoints a guardian or conservator. This can be an expensive and time-consuming process. Keep in mind that all financial powers of attorney documents are not created equal, and a comprehensive power of attorney with expanded authority should be considered if a period of long-term care is a possibility in the coming years. (I will discuss this topic in more detail next month.)
In addition to the powers of attorney, you should also consider whether a Living Will is right for you. A Living Will allows you to communicate your wishes to the medical community and your family in situations where life-sustaining care is required.
The topic of estate planning is one we would all like to avoid; it is never easy to introduce the discussion with our parents. However, if you are the person who will ultimately be left cleaning up a potential mess left by your aging parent, begin the discussion by finding out: “Where’s the Money”, and “Who Should be the Agent”.
