Summary and Takeaways
Ensuring that your loved ones understand your wishes and how to access your assets is a vital part of financial and estate planning. In the unfortunate event that you become incapacitated or die, unless you’ve provided them adequate information they will be left in the dark during a most difficult time. But with proper foresight and planning, that unnecessary burden can be eliminated. They’ll have clear instructions to follow regarding such things as paying your outstanding bills and taxes, collecting monies or insurance payments owed to you, communicating with your legal and financial advisors, and executing your wishes.
- Annual or semiannual family financial matters meetings with your significant other and trusted family members can help ensure your financial and legal affairs are in order.
- You don’t have to disclose the value of your assets, but they do need to know where to locate them and various important legal and financial documents.
- Copies of your Will and Trust Documents should be located in an secure but accessible place – along with Social Security statements and prior year tax returns
- Family members need to know where both offline and online savings, retirement, and investment accounts are located.
- Provide contact information for insurance carriers, attorneys, and tax planners, and financial advisors, as well as mortgage companies.
If 2020 has taught us anything it is that life can bring unpleasant surprises. Unexpected events can happen at any time. Do you ever wonder how your spouse or family members will understand your finances if you are suddenly taken from them or incapacitated and unable to communicate? It is unpleasant to think about these types of situations, but sadly they occur all too often.
If something bad were to happen to you today…
- Would your loved ones be able to access the critical information they’d need to deal with your life insurance and other assets? This includes contact details for your financial advisor, passwords, and key documents.
- Would your loved ones know and understand your personal wishes regarding organ donation, funeral arrangements, and how to distribute cherished items?
- Could your loved ones easily find your written or electronic instructions?
If you are unable to answer yes to all of these questions, you should consider scheduling annual or semiannual family financial matters meetings with your spouse, significant other, or another trusted relative or friend. You don’t have to go over all the details—like the exact value of your assets or what your will contains—but make sure he or she knows where to find this information in the event of your death or incapacitation.
While taking the time to periodical review this information may seem burdensome, it will give you, your spouse, and family members peace of mind in knowing that your important financial matters will be handled and that your final wishes are understood.
At a minimum, the following items should be reviewed:
Regular Bills – This includes utilities, phone bills, cable bills, auto insurance, home insurance, etc. Review the following: name of service provider, frequency, due date, and average amount. Additionally, review how the bills get paid. Are they paid online, automatically, or by check?
Pension Income – This includes Social Security, CPP, OAS, military pensions, and private pensions. You should review the amount, when it is received, and to which account it is deposited. For private pensions, review the survivor benefits.
Life Insurance Policies – Review the policy type – term or whole life. Review the premium amount and frequency. If there is a whole life policy, confirm the policy’s cash value. Copies of life insurance policies are among the most important documents for your family to have. Family members need to know the name of the carrier and policy number to file a claim.
Other insurance – Family members should be aware of any other insurance policies you may have. This includes health, disability, and long-term care.
Loans – This includes mortgages, home equity loans, auto loans, etc. Important items to review are the start date, the original amount borrowed, the current balance, the term, and the interest rate. Also review how the payment is made. It is paid by check, paid online, or paid automatically?
Financial Accounts – This list of accounts to review should include savings, checking, investment, and retirement accounts. Important items to review are the names on the accounts, the locations of the accounts, and who has signing authority. For retirement accounts such as IRAs, 401ks, and RRSPs you should review the account beneficiaries.
Estate Planning Documents – Although the exact contents of your will may be kept private, the existence and location of your will should be disclosed to family members. Trust documents should be kept with wills for ease of access. Be sure to discuss pertinent terms with those who will be involved. Copies of living wills and healthcare power of attorneys should be made available to anyone who will be involved with your care.
Important Contacts – Make sure your spouse or family member has contact information for the professionals you work with. The list should include your estate planning attorney, financial planner, and insurance agent.
Important Documents – Being able to locate important documents when they are needed can save enormous amounts of time and unnecessary work. Your spouse or family member should know where the following items are stored: birth certificates, marriage license, armed service records, death certificates, divorce decrees, property deeds, Social Security statements, and prior year tax returns.
Important Dates – Knowing what is due and when is as important as knowing how much is due. You should review when State and Federal Taxes are due (and estimated payments if any) as well as when property taxes are due.
While you may have most of this information memorized, that’s simply not enough. When you’re gone, it will be gone too. However, headaches and heartaches can be avoided by properly reviewing financial matters with the people you’ll leave behind. If you have never had a family financial matters meeting, set one up sooner rather than later.