If you’re hit with a serious health, relationship-changing, life-ending, or other significant event, your world can turn upside-down in an instant. While we never want to think about the worst-case scenario, doing so in advance will help alleviate stress during emotionally charged times.
Holistic financial planning largely focuses on exciting milestones, such as saving for your child’s college, the ability to travel or make large purchases, setting yourself up for your golden years and more. However, there are also critical items to address that ensure your loved ones can manage the assets you’ve worked so hard to secure if something happens to you.
Create a master guide
This planning document is separate from your will, trust, advance directive or other legal documents. It serves as a guide for loved ones to access and manage your finances should they need to. It’s important to let a trusted loved one know what’s included in this document and where it’s kept so they can find it when needed.
This guide should include your bank accounts, credit cards, savings accounts, and investment accounts, along with passwords and access details. It’s also important to list your different living expenses and recurring bills, how they’re paid, and due dates so your loved ones will know how to oversee these.
Creating a document with your financial team that houses these details can greatly reduce stress in a nerve-wracking time.
Confirm your beneficiaries and titling
While building out this planning document, be sure to review who is listed as your beneficiary on each account. As life evolves, so may your preferences. You want to ensure you are comfortable with who’s managing your funds or inheriting your accounts when that time comes. You should also review your assets and liabilities to confirm they are titled correctly, especially if you’ve adjusted your will or trust recently. If they’re not titled correctly, this could cause legal challenges and prevent your wishes from being carried out as you had intended.
Enlist the right financial partner for you
Building a trusted relationship with a financial partner is key. It’s imperative to find someone who you connect with and feel comfortable talking to about your personal information. Your advisor can also be a point of contact to support your loved ones in managing your finances when needed.
Once you’ve solidified your plan, consider having a meeting with your advisor and your beneficiaries so they have the opportunity to hear about this document before it’s needed. This will help ensure everyone understands the complexity of your finances, has the opportunity to ask questions, and feels confident in managing everything if the worst happens. This also enables your loved ones to meet and know how to contact your advisor if needed.
Review information annually
Finally, it is important to review this information consistently. Add this document to your annual financial planning review with your financial advisor, so you’re regularly evaluating and adjusting items as needed. The guide is only as good as the information within it, so it’s critical to keep the details current.
It can be daunting to think about the worst-case scenario and to go through the process of capturing all these details. However, the work you do now will provide peace of mind and an invaluable resource to your loved ones when they need it most. Lean on your financial team to help you create this document and discuss any other items you may need to add to your financial legacy plan.
Explore tips for protecting your financial future through the Protecting Health and Wealth playlist on the UMB Financial Education Center.
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