Sometimes things in life happen suddenly and without warning. The fire alarm goes off. The battery in your car dies. The lights go out. When these things happen, you are either ready for them or you are not.
Financial planning means being ready for life’s unexpected moments, the ones that matter most. Where I live in the Twin Cities’ northern suburbs a prominent business owner that we all knew suddenly died in an accident. It lead me to wonder how well prepared we are for these types of events.
What if one of those moments suddenly happened to you right now? Is your will up to date? Is your spouse ready to take over your affairs? Are your beneficiary designations correct? Are your insurance, business succession and estate plans in order?
One of the things I worry about in my own financial planning is that if something happened to me or my wife, would we or someone else know where to go to get key financial information especially passwords, login IDs and other electronic information. What if something happened to both of us? Are we prepared?
There is some debate on what is considered “best practices”, but following is a short list of things to consider:
- User ID, Password and Log in information for your financial accounts, and social media. It is not supposed to be written down, but in real life I don’t know how else you could realistically provide this information to someone if you were suddenly incapacitated. Whatever system you use, make sure the key people in your life know how to access your security information if are unable to.
- Be sure your will includes documents to establish power of attorney and health care directives.
- Financial inventory. A brief list of what’s what and where it is. Be sure to include life insurance policies, future pensions, location of safe deposit boxes, and other information that may be relevant to someone taking over your affairs.
- Have a plan. Whether you realize it or not, you do have a plan. Even “no plan” is a type of plan, one that you have no control over and that does not necessarily consider your priorities and values. Unfortunately, the “no plan” plan is the default plan for many of us. Your family deserves something better.
In our case, my wife and I have a financial plan that includes a will, as well as an inventory of all our financial assets including insurance policies and contact information for our financial contacts – insurance agent, attorney, accountant. I recently completed a basic succession plan for my business. But is that enough? Probably not. I think we still have some work to do.
What about you? You never know when these moments will come. But when they do, are you ready?