Back in May, we featured a blog that referenced Benjamin Franklin’s famous quote, “Nothing can be said to be certain, except death and taxes.” That blog focused on taxes, while this one will focus on the other, which for many people, can be a sensitive topic to discuss. While you can’t predict when it will be your time to go, you can at least plan for it to help make things easier down the road for your loved ones.
There are many things to consider in this type of planning; we focus on five specific tips. For a complete list, you can visit the National Institute on Aging.
- Get Organized
This seems like a fairly obvious step, but with all of the messy estates we’ve seen over the years, it seems like a necessary one to mention. This step alone can help save your loved ones hours spent searching for information needed to process your estate. Start by making a list of your bank accounts, retirement and investment accounts, insurance policies, personal property, etc. If you work with a CFP® professional, they should help you with this, and they may even have an online solution that will make this process simpler and more efficient.
- Get Organized 2.0
Given that we live in a technological age, there are additional items to consider that were not so prevalent years ago. One is your login information for your various online accounts. This includes usernames, passwords, PINs, and security codes. Your family may not need access to every online account you have, but make sure they have this information for any website they will need to access. Write the information down, store it in a secure location, or use an online software program that your family can access. Also, think about your online presence with social media; you should think about each of your accounts and determine what you would like to happen with them upon your passing. Each site will likely have different options, so be sure to review each of them to choose what best suits your wishes.
- Create an Estate Plan
If you don’t have an estate plan, start working on putting one together. Give some thought to your current situation and where you would like your assets to go if something happens to you. This can be laid out in a will or trust; your financial advisor or estate attorney can help you decide which option is best for you. You’ll also want other basic documents in place, such as a financial and health care power of attorney, living will, and HIPAA waiver. If you have minor children, there will be additional issues to address regarding their care and how any inheritance they receive would be structured.
- Giving to Charity?
If you’re thinking about leaving some of your estate to charity but can’t quite figure out who deserves your hard-earned money, you might want to speak with a philanthropic consultant. A person in this role can bring a strategic mindset to charitable giving by helping you think about issues you are most passionate about. Once you figure out the causes you would like to support, they can also help you find good quality organizations that align with your wishes.
If you already have charities in mind, think about whether you want your funds to go to a specific focus of the organization or allow them to use it for whatever they need. If you prefer a particular focus, give some thought to how the organization can be held accountable with your funds so that they are used for what you intended. You may need to engage an attorney specializing in non-profit organizations to help you create the legal documents necessary for this approach.
- Make Funeral Arrangements
One of the most helpful things you can do for your family is plan your own funeral (and pay for it) so that your family does not have to deal with this at such an emotional time. You can even buy an insurance policy so that you don’t have to pre-pay the full amount up front. There are different types of insurance for this, so make sure you talk to your CFP® professional about the differences to choose the option that best fits your needs.
Finally, think about who will be receiving your assets. Do they have a trusted advisor who will help them navigate this unfamiliar territory? It’s critical that they have the proper guidance so they can avoid costly mistakes. If you work with a trusted advisor, it’s extremely beneficial to introduce your family to them during your life to start developing a relationship.
If you do not have a trusted advisor, you should look into hiring a fee-only CFP® professional to help you think through this complex topic and any other financial issues that may be top of mind. Team Hewins can help – contact us today to get started.
Team Hewins, LLC (“Team Hewins”) is an SEC registered investment adviser; however, such registration does not imply a certain level of skill or training, and no inference to the contrary should be made. We provide this information with the understanding that we are not engaged in rendering legal, accounting, or tax services. We recommend that all investors seek out the services of competent professionals in any of the aforementioned areas.