If you were to become incapacitated or die, how easy would it be for relatives or someone else to take over your financial affairs? Would they have to search through a mountain of paperwork? If you don’t receive paper statements, would they even find out about all of your accounts?
No one likes doing funeral planning or other things that remind us of our own mortality. But death and injury are a fact of life. Creating a personal financial directory makes it easier for someone to cancel your accounts or otherwise manage your finances if you are not able to. You may also find yourself using it if, for example, your wallet is stolen and you need to notify financial institutions and creditors or you forget an online password.
Make a list
All you need to do is set aside a few hours one day. Think about all of the accounts and obligations you have, including a mortgage or rent, loans, credit cards, utilities, checking and savings accounts, investments, retirement funds, and insurance. On a piece of paper, list the following information about each one: the account number, who it is with, company contact information, online username and password, location of statements, and monthly payment and due date (if applicable). You might want to also include the name and contact information for any financial advisors, such as an accountant or insurance agent. Periodically revisit the list to make sure it is up-to-date.
Put the info in a secure place
In order for your financial directory to be helpful, someone has to know it exists. You may have no problem giving it to a trustworthy relative or friend, but it is completely understandable if you are worried about handing over your account information while you are still in good health. One option is to leave the list in a safety deposit box or fire-proof safe in your house.
(Just make sure that whoever will be handling your affairs will be able to access it). Another option is to give it to a lawyer or other financial professional. (Once again, make sure the designated person knows who to contact).
Take legal precautions
Besides creating a financial directory, another way to protect your financial affairs is to assign someone durable power of attorney for finances. This specifically gives him or her the legal right to make financial decisions for you if you are unable. You can create a durable power of attorney document with the help of a lawyer or computer software (Quicken Willmaker Plus, Rocket Lawyer and LegalZoom all receive high ratings). Make sure to choose someone who is trustworthy. If you have no friends or relatives who are appropriate, you can use a professional, such as a lawyer or accountant.
Make a will
You aren’t required to hire a lawyer to prepare a will; as long as your will meets the legal requirements of your state, it’s valid whether a lawyer drafted it or you wrote it yourself. Do-it-yourself will kits are widely available: Search for “online wills” or “estate planning software” online to find options (again, Quicken Willmaker Plus ranks high in ratings; click here for more information on preparing a will). Reviewing your will periodically, especially after a life event such as getting divorced, getting married or having children, will keep you from unintentionally creating problems for your heirs if you were to die unexpectedly.
A little bit of planning can ensure that your finances are taken care of even when you are not able to manage them yourself.
Source: Balance Financial Fitness
Please note: Comments are not monitored for member servicing inquiries and will not be published. If you have a question or comment about a Quorum product or account, please visit quorumfcu.org to submit a query with our Member Service Team. Thank you.