By: Kris Dowejko, Senior Vice President and Financial Advisor at Sage Rutty & Company, Inc.
When Susan’s husband passed away suddenly, the stark reality hit her hard - she was all alone and didn’t have a handle on her finances, or her future. She and her husband had often talked about taking the time to get organized, but daily life got in the way. He handled their investments but she wasn’t interested in the stock market, so she paid little attention when he talked about their portfolio. She knew her husband had a Will but it was drafted by their attorney who had retired years ago. She wasn’t sure what her next step was, and didn’t know who to call or where to turn.
Unfortunately, Susan’s story is a common one. More often than not, setting even the simplest of Estates can be confusing, stressful, and overwhelming. For some reason, getting your affairs in order seems to be on everyone’s list, but it is one of those things we all tend to put off. Unless you’ve handled someone else’s affairs, you may not realize how difficult the job can be. Even if you have heard the horror stories and know how important it is to get organized, most people aren’t sure what needs to be done. Whether you’re planning ahead for your loved ones, or you’re named Executor for someone else, there are a few simple steps you can take to make things easier:
Step 1: Get Everything Together. Consolidation is the key to making things easier for your family.
Gather your important paperwork and keep it all in one place. This includes your Will, Healthcare Proxy, Living Will, Power of Attorney documents, investment statements, beneficiary forms, and insurance policies.
Document what you have and where it is, so nothing gets lost. Focus on the details that only you may know. List things like life insurance policies and investment accounts, usernames & passwords, online banking information, and secret hiding places. These details can make the job of handling your affairs much easier and can also help avoid potential conflict among family members.
Consolidate your investments, if possible, to simplify your finances so your Executor has less work to do. The fewer accounts you have, the easier it will be to handle your affairs.
Step 2: Create a Support Network.
Even the most organized and well-documented plan can quickly become a disaster if you don’t have the right team of people working on your behalf. Choose an Estate Attorney, a Financial Advisor, and a CPA (Certified Public Accountant) you feel comfortable with. Be sure to involve your family in the selection process and make sure they get to know the advisors you’ve chosen. Your loved ones will be comforted by the fact that they have a team of people they can rely on when something happens.
Step 3: Engage Your Support Network
Once your support network is in place, bring everyone together and communicate your wishes to your team. Let them know how you would like your assets to be distributed and share any potential concerns you may have. Your Financial Advisor, Estate Attorney and CPA should work together to make sure your finances and legal documents are coordinated properly and nothing falls through the cracks. Only then will you truly have a coordinated plan and you can be sure your wishes will be carried out.
Have your Attorney review your current Estate documents to be sure they are current with State and Federal laws.
Ask your advisors how to avoid probate to make things easier for your family, if appropriate.
Have your Financial Advisor check your beneficiary designations to be sure the right people are named.
Update your plan every few years or if a major life event occurs.
Getting your affairs in order is an incredible gift that will provide your loved one's clarity and direction during a difficult time. When you plan properly, your wishes will be carried out and you can leave a legacy to last for generations.
The contents of this communication are for informational purposes only and do not constitute legal or tax advice. You should consult with your tax professional and financial advisor in relation to your individual circumstances.