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Nothing brings home the
importance of having our affairs in order than seeing the
effects firsthand in your own family. My mother-in-law’s
recent death means my family is dealing with the realities
of settling her affairs. Her advanced-planning greatly
simplified the process. And it will for you, too.
When her cancer returned, she had the wisdom and foresight
to make sure that there would be proper access to her assets
should she become incapacitated and that they would be
easily transferred after her death. Those facing a terminal
illness are motivated to address these issues. For the rest
of us, they are often overlooked.
No one lives forever and mental capacity can quickly
diminish, so it is important that you prepare now. Besides,
these issues aren’t only for the elderly. One of my clients
(an energetic, full-of-life 50 year old) was recently struck
by an automobile and killed. Another middle-aged client
developed a rare disease and lives in extreme, constant pain
requiring heavy medication.
There’s no way to know when or if tragedy might strike, but
there are several simple steps we can take to make sure
these events don’t create a tremendous burden on ourselves
or our loved ones.
A Power of Attorney (POA) allows you to control who manages
your financial affairs when you can’t. Think about it. If
something were to happen to you today, who would be able to
pay your bills and handle your finances for you? If you
don’t have a POA in place and up to date, it may be
necessary for the courts to step in and name someone as your
conservator.
If you don’t have a current POA, get one. If you have one,
pull it out and review it to make sure it accurately
reflects your desires. If your Power of Attorney is several
years old I recommend signing it anew because some
institutions hesitate to accept a POA that is several years
old.
For instance, one of my client’s in Oregon worked in a
financial services office. One day a customer came in to
complain. He had a Power of Attorney signed by his mother
that was several years old. A bank would not accept it
because it was not signed within six months. If your Power
of Attorney is over one year old consider having it signed
and notarized again.
What about the distribution of your funds after death? You
can designate beneficiaries on bank and brokerage accounts
using Payable on Death (POD) or Transfer on Death (TOD).
After your death, the money will quickly and easily go to
the beneficiaries you named. All your heirs have to do is
present a certified copy of your death certificate, sign
some paperwork and the funds are released. No attorneys,
courts or probate.
Believe me, when someone you love has passed away, the last
thing you want to do is deal with lawyers, courts and mounds
of paperwork. And your loved ones shouldn’t have to. My
mother-in-law took advantage of POD and it made life much
simpler on her loved ones.
Speaking of beneficiaries, make sure that all of your
retirement account and life insurance policy beneficiary
designations are up-to-date. Often beneficiaries are named
years or even decades before a person’s death. It’s easy to
forget to update them as situations and circumstances
change.
For instance, your financial situation could change for the
better or the worse. Events such as a marriage, divorce,
death of a spouse or a falling out with a child might cause
you to want to change your beneficiaries. You may need to
rethink a beneficiary based on changes in their lives, as
well. They could be going through a divorce or become the
subject of a lawsuit. The bottom line is to make sure your
wishes are reflected and carried out.
Advance planning is something we all know we should do. All
too often we put it off for another day. Unfortunately, this
is one area of planning that can ONLY be done ahead of time.
If you wait until you need it, it’s too late. So don’t put
it off. Take care of it today.
If you have questions or would like more information call
toll-free, 1-877-827-1463 or go to
www.guardingyourwealth.com. You can also reach me by email
at jeff@guardingyourwealth.com.
Mr. Voudrie is a Certified Financial Planner, nationally
syndicated columnist, and the President of Legacy Planning
Group, Inc., a Private Wealth Management firm in Johnson
City, TN. |
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