We humans have an understandable tendency to take action on things that are important to us in the moment. And until we have something happen in our lives that remind us that our risk of mortality is 100%, we often leave the “when I’m gone” wishes on the back burner. This is why 60% of Americans still die without estate planning documents in place.
Triggering Event
I host a “Get Your Financial House in Order” series at church to help attendees participate in a group discussion with an estate planning attorney, a CPA, and a Certified Financial Planner. I always start each three-week series with the same question: what brought you here today?
The answers are varied. I recently watched three of my closest friends unexpectedly become widows. I just lost two of my sisters. My parent passed away and it was a mess. My spouse’s health is failing and I’m getting worried. I am helping my elderly parents make sure their planning is in place after one of them fell. The common denominator is that something happened (I call it a triggering event) to cause them to take action now.
Is it Really all Taken Care of?
Also, I have learned over the past 20 years what it really means when someone says “Oh, I have all of that stuff taken care of!” It means they have a will and/or trust drafted, and that may be it. But how long ago was that? (documents should be reviewed every 3-5 years or if there has been a change in circumstances or the laws) And did they also draft Powers of Attorney for medical and financial? (risking the need for a Conservatorship and/or Guardianship is very expensive, paperwork intensive, and exacerbating to implement) And most importantly, did they do the estate planning homework that comes AFTER the documents are drafted? (“fund” the trust and/or update asset titles and beneficiary designations)
Let’s Get Started
I encourage everyone to start with getting current estate planning documents drafted/updated by an estate planning attorney: will/trust, Powers of Attorney for financial, health care, and mental health (in some states), and disposition instructions (for personal property and final wishes). THEN, I implore you to be aware of and act on these three commonly overlooked mistakes:
- Not having an asset list.
To Do: Prepare and annually update a list of what you own and what you owe. (I designed a comprehensive one called My Net Worth Summary).
How does anyone who hasn’t lived in your household, have any idea what accounts, property, etc. you have that may need to be retitled, dispersed, etc? Even a spouse may not know all of those details if he/she is not the one who usually handles the finances. So do this for each other, then for the family that will be involved after the survivor of a couple is also gone.
Estate planning attorneys have seen too many families not able to find the will, have no idea what bank accounts, IRAs, or investments need to be contacted, or disagree about cremation/burial when nothing was in writing. One Successor Trustee I heard from spent hours driving to banks based on old statements found in the filing cabinet only to find out that those accounts were closed years earlier. Think of an asset list like a map, of what resources are available and eventually needs to be distributed.
2. Not having a Personal Property Disposition List.
To Do: Handwrite or type a list of personal items and the names of the people you want to receive them, sign and date at the bottom.
Most sad family feud stories seem to be around the distribution of sentimental items, not necessarily monetarily valuable items. When no wishes are in writing, family is left to argue over selling/donating/trashing/splitting “the stuff.” Too often the end result is hard feelings and even not speaking to each other. You can update this list and replace the old any time, keeping it in with your will/trust. And if you don’t have any special wishes for anything specific, you may want to write that on the list instead, since that is a decision in itself.
3. Not keeping your beneficiary designations current.
To Do: Review your current beneficiary designations to confirm they reflect your wishes.
Don’t guess on this one! If you don’t have a record or see the designation on a statement or online, call the custodian of the account to confirm the current designation. We set up our beneficiary designations long ago in many cases, so life may have changed. Then you need to update your designations accordingly. Most often an estate planning attorney will recommend you list both a primary and a contingent beneficiary on your accounts, in order to avoid probate.
Our brains do best with no more than three ideas at a time. So I encourage you to pick one of these three commonly overlooked mistakes and make the To-Do associated with it a goal for you to act on this month. Your spouse and/or family will thank you!
Marie Burns is a Certified Financial Planner, Speaker, and Author of the bestselling Financial Checklist books. Find Marie on Facebook or contact her at [email protected]
This article was first published at 60 and Me – a community that helps women over 60 live happy, healthy and financially secure lives.