Just about every blog that I type is triggered by an event, situation or case that I have come across in my day to day role as a Financial Advisor. Recently I began working with a family who’s Mother has required long term care. The adult children are working through all of their Mother’s files and paperwork to make sure they understand what she has and what she wants done, now and in the future upon her passing. It made me think about the basics that people need to focus on to get your finances in order while you are alive and when you pass away are. The following is but a brief list of ways to get your finances in order. They are in no particular order but all important.
Wills and Estate documents
One of the most important things to complete to get your finances in order while you are of sound mind and body is to have a Will done by a Lawyer. Your Will is your game plan to direct how you want things handled when you pass away. Be as specific as you can when making your Will because anything that can be left to interpretation, will be interpreted and it might not be interpreted the way you intended.
Related article: Now is the time to draft a will
Along with you completing your Will you should have directives completed if you become mentally or physically incapacitated. We have talked about Power of Attorney before. Enduring Power of Attorneys that kick in when you can no longer make those decisions for yourself. Appointing a POA is as important as appointing a beneficiary or executor. Don’t take it lightly and make sure that you have asked the person who you want to appoint if he or she would be willing to do that.
Related article: Understanding Enduring Power of Attorneys
What or who is going to pay for your needs if you require some type of care. It is a wonderful world we live in today. We are living longer lives than ever before. The down side? We are living longer lives than ever before. We use to get sick and die, now we get sick and live. Who or what is going to pay for that? You may have set aside money for that which is excellent. You may want to look into living benefits such as Disability Insurance, Critical Illness Insurance or Long Term Care coverage to supplement or pay for the total costs in the event of an illness or care situation.
Do you own life insurance? Life insurance can alleviate the costs of one’s death. It gives the beneficiary (whomever is appointed) some breathing room in order to deal with the financial impact of a death while they deal with the emotional. Imagine the relief knowing that there are no financial concerns because the person who passed away made sure there was enough money to address such things as income, taxes, payment of debt etc prior to his or her death because they purchased life insurance.
Related article: Do you need life insurance?
A written financial plan.
The majority of Canadians get to retirement age without any written financial plan. Have a plan completed. This will help you organize your thoughts and wishes in a concise way. It will expose where the risks lie, where the holes are and how to fill them.
Related article: What is financial planning?
By checking off these items listed above you have made someone’s life so much easier to help you when you can no longer be there to help them.