Getting Your Affairs in Order

Getting Your Affairs in Order

By Lynn Schweikart
Published December 15, 2016

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During the course of a routine medical checkup, Rick received devastating news: he had an incurable form of cancer, with only a very short time to live.

In addition to coping with this unexpected turn of events, Rick and his wife Judy had significant financial planning decisions to make in a very limited time. To further complicate matters, their financial situation was somewhat complex. Rick had handled the couple’s money matters for their entire married life—from paying the bills to managing their investments, including more than a dozen accounts spread across multiple firms. Because he had taken care of everything, Judy was only vaguely aware of the details of this aspect of their lives.

When death, illness, or an incapacitating event strikes, a family is already in crisis. By getting your affairs in order ahead of time, you can remove a great source of uncertainty and stress. Yet a survey of high-net-worth families found that more than one-third have not taken the most basic steps to protect and provide for their loved ones.

Of course, setting up your plan is only the first step to getting your affairs in order. You also have to make sure your executors and those who will be acting on your behalf in financial and health-related matters are aware of their role and can access the documents they need to carry out your wishes. Unfortunately, too many people overlook this step. A 2013 US Trust survey found that while 63 percent of women and 70 percent of men say they have organized all their personal, financial, medical and legal information and records in one place, only 49 percent of women and 57 percent of men have let the executor of their estate know how to access that information.

What information is important for your family or caretakers to know? The National Institute on Aging’s website provides an extensive checklist:

Personal Records

  • Full legal name
  • Social Security number
  • Legal residence
  • Date and place of birth
  • Names and addresses of spouse and children
  • Location of birth and death certificates and certificates of marriage, divorce, citizenship, and adoption
  • Employers and dates of employment
  • Education and military records
  • Names and phone numbers of religious contacts
  • Memberships in groups and awards received
  • Names and phone numbers of close friends, relatives, doctors, lawyers, and financial advisors
  • Medications taken regularly (be sure to update this regularly)
  • Location of living will and other legal documents

Financial Records

  • Sources of income and assets (pension from your employer, IRAs, 401(k)s, interest, etc.)
  • Social Security, Medicare/Medicare Supplement or Medicaid information
  • Names of your banks and account numbers (checking, savings, credit union)
  • Investment income (stocks, bonds, property) accounts and numbers, along with stockbrokers’ and financial advisors’ names and phone numbers and email addresses
  • Copy of most recent income tax return
  • Location of most up-to-date will with an original signature
  • Liabilities, including property tax— what is owed, to whom, and when payments are due
  • Mortgages and debts—how and when they are paid
  • Location of original deed of trust for home(s)
  • Car title(s) and registration(s), along with other modes of transportation
  • Credit and debit card names and numbers
  • Location of safe deposit box and key

Legal Documents

  • Copies of your will and trusts, if any
  • Advance directives, such as a living will or durable power of attorney for health care
  • A general power of attorney or durable power of attorney

While Rick and Judy had not created an overall financial plan in advance of Rick’s illness, they were fortunate to have the time to put what they needed in place. Had Rick been incapacitated by a stroke or died as a result of an accident or sudden heart attack, the impact would have been even more difficult and overwhelming for Judy.

You might also want to consider the financial ramifications of a potential illness or accident well in advance. Pat Richard, Managing Director of HJ Sims’ Bloomington, Minnesota office, recommends you have enough liquid assets that you can tap into without having to sell stocks, bonds or other investments that may have tax implications. Richard also urges those with a family history of debilitating illnesses like Parkinson’s, Alzheimer’s or stroke to consider the potential long-term financial implications of these conditions.

Trouble Worth Benefits

There is no doubt that getting your affairs in order will require some effort on your part. However, the benefits to your loved ones—and potentially yourself—of doing so ahead of time, will far outweigh the amount of time you’ll put into it. Richards suggests you think of it as a two-step process: create your plan; communicate your plan.”