They’re not things we like to think about: burglary, accident, disability, sudden death, natural disaster, an extended hospital stay. But the unexpected happens, so it’s always a good idea to be prepared.
If it happens to you, will your bills get paid? Will your loved ones and your advisors have the information they need to carry on? Are your plans and wishes known?
For most of us, the answer is no―or at least partially no. It’s not that we don’t want to be prepared. But preparing can be a complicated process and takes ongoing maintenance.
Organizing Your Personal, Financial, and Legal Records
Whether you are 21 or 91, there’s never a wrong time to organize your personal, financial, and legal records. If you are incapacitated for any reason―or in the event of your death―quick and easy access to this information is crucial for your family and for your legal and financial advisors. If the unexpected does happen, it helps to ensure that your family and important advisors can carry on.
Last year, Julia Nadine was diagnosed with a serious and potentially fatal health problem. Although she recovered after an extended hospital stay and convalescent period, the crisis helped her to realize the consequences of her ongoing failure to plan.
Julia is currently married to her third husband and has two children from her former marriages. At the time of her illness she had no health care directive that her family could find, no financial power of attorney, no will, and apparently no plan for her quite substantial estate. Her husband had difficulty locating important documents and accessing her online bank account and related bill-paying services. In addition, her children’s preferences for her care often conflicted with her husband’s decisions during her illness and strained the relationships.
Although Julia was not ready for her crisis, it wasn’t because the topic of emergency preparation doesn’t get discussed. A recent Wall Street Journal article, for example, covers the impact of going paperless using online banking and brokerage accounts.
The IRS, too, stresses the importance of being prepared for the unexpected. Among other recommendations, it suggests scanning important documents and backing them up on removable media that can be stored in a safe location, preferably in another city. The IRS also recommends compiling a room-by-room list of the contents of your home, including photographs and/or video documentation, and safeguarding important documents such as insurance records and home closing statements.
So, where do you start? And what should you include?
Lifetime Planning Tool
To assist you in gathering your personal, financial, and legal records, Bader Martin has prepared a Lifetime Planning Tool. It organizes your information according to the following categories:
Personal
Marital
Family
Employment
Military Service
Real Estate
Financial Account
Stocks/Bonds
Automobile
Titled Asset
Business
Safe Deposit Box
Insurance
Funeral and Burial
Tax
Will
Trust
Durable Power of Attorney and Health Care Directive
Contacts
Miscellaneous
The tool provides a framework for gathering and maintaining essential information over time―a sort of personal inventory. But don’t let the volume of information contained in the tool document discourage you from using it. You don’t have to prepare everything at once; you can take your time. And it’s far better to complete even a small portion of the requested information than not to begin at all.
To use the Lifetime Planning Tool, you can enter your information electronically in Microsoft Word® or enter it on a paper copy. You’ll need to gather supporting hard-copy records to supplement the information in the tool. If you like, Bader Martin will create a CD with your completed Word document and scans of all your supporting documents.
In the process of entering your information, you may identify elements lacking in your own financial and/or estate plan. You should know that the tool is not intended as a substitute for professional advice in financial or estate planning. Always get great advice.
