Imagine for a moment you are on your way home from the store, and a dog jumps out in front of you. In a moment of surprise and quick reaction, you do your best to avoid the dog; however, you lose control of your vehicle and hit a tree. Thankfully, you survive the crash, but it requires an ambulance ride, a trip to the hospital, and a long recovery ahead. In a matter of a moment, your life has just changed. Fortunately, you didn’t die today. Very few of us die suddenly; most of us fade away over the years. In my column today, I will talk about what happens when you are no longer the right person to make the most critical decisions and what you should have in place to limit mistakes if you are fading away.
These situations don’t often happen for most people, and likely you’ll only have to deal with something like this once in a lifetime. As financial planners, we witness this situation all too often. What should you consider if you find yourself dealing with these unfortunate circumstances? It would be best to plan for the expected challenges to better prepare for issues we hope never arise. Unfortunately, most people don’t plan and are forced to make in-the-moment decisions that could negatively impact your financial future. At Financial Enhancement Group, one of our Five Critical Elements to planning is Risk Management and Life Planning. We have a designed process to help our families when an unusual life event arises – good, bad, or ugly. If you are not working with a fiduciary professional, you must define the person and process to assist you when you can no longer make decisions on your own. Here are some things to consider:
- Have the correct health care documents in place so that someone can make decisions for you if you cannot. Some standard documents that need to be in place are a Power of Attorney, a Living Will, and Do Not Resuscitate. These documents will aid the person in making difficult decisions that you have already defined.
- Keep an updated record of your financials so the person helping you during this time can take over. Provide them access to your financial obligations and assets. Consolidating accounts such as bank accounts, investment accounts, and IRA/ROTH IRAs is beneficial.
- Confirm your beneficiaries are up to date, and we recommend reviewing them annually.
- Make sure your trust and will documents are easily accessible. These also need to be reviewed regularly to ensure they stay current with any changes in tax policy, estate tax laws, and changes in your life or that of your beneficiaries.
Keep a hard copy of the documents mentioned above and keep an electronic copy. Most importantly, develop a plan and convey your objectives to the people responsible for implementing your wishes. Keep them informed so they can act appropriately rather than react in a state of emotional turmoil.
Joseph A. Clark is a Certified Financial Planner and Managing Partner of The Financial Enhancement Group, and an SEC Registered Investment Advisor. Contact Joe at yourlifeafterwork.com or 800-928-4001. Securities offered through World Equity Group, Inc. Member FINRA/SIPC. Advisory services can be provided by the Financial Enhancement Group (FEG) or World Equity Group. FEG and World Equity Group are separately owned and operated.