Estate: Don't Leave Loved Ones In a Lurch

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.

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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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