Inspiring Confidence: Persevering Financially After the Loss of a Loved One

Many of us don’t want to think about our own mortality, much less that of those we hold dear. But death is something we all will face eventually — and sadly, it can happen at any moment. While the topic may make you uncomfortable, wouldn’t you rather be prepared as much as you can be? Or better yet, wouldn’t you want to have the comfort of knowing your loved ones will be taken care of after you pass away?

Planning beforehand can help in the aftermath of a loss – lending a sense of order to a difficult time. Preparing ahead of time also can provide guidance to friends and family and is one of the greatest gifts we can give to those we leave behind.

Preparing for the Inevitable

As with many areas of life, having a plan can make a very tough time a little easier to get through. Your plan should be carefully considered and thoroughly discussed by all relevant parties, and it has to cover short and longer-term considerations alike. There’s a lot to think about, which can be overwhelming, so it may help to break the planning up and take it a step at a time.

Use this list to help you work through the necessary planning steps to ensure as smooth a transition as possible when the time comes. And know that the advisors at Signature Wealth Strategies are here to answer any questions you may have along the way.

Put it in Writing

It’s a good idea to involve your family as you make important decisions that may affect them. But you’ll also want to make sure they clearly understand your wishes to help avoid conflicts down the road, too.

Create a will. First and foremost, everyone – and we mean everyone – needs a will. Use your will to clearly document your wishes for the transfer of your financial and tangible assets. The goal here is to transfer assets smoothly.

Another way of conveying wishes to surviving loved ones is through a Letter of Instruction (or Letter of Intent). These are typically used to describe a type of funeral arrangement or distribution and care of assets that are not included in legal documents such as a will.

Store your will and anything else you put in writing with your other essential documents and make sure your family knows how and where to find this information.

Work with the appropriate professionals to help ensure everything is thoroughly and accurately documented. Without a formal will, the state will decide how your property will be distributed after your death.

An estate plan should include these five legal documents:

• Will
• Revocable Living Trust
• Durable Power of Attorney for financial affairs
• Durable Power of Attorney for medical decisions
• Living Will

Your Financial Team

The myriad of documents and processes that take place before and following the loss of a loved one requires diverse financial skills. Too often, people take a one-sided view of their finances by working with just one financial professional. This is a good start, but the specific skill sets of financial advisors, accountants, attorneys, and insurance agents are equally important. Putting together a team with these experts will help you achieve the best possible financial future.

The financial advisor will help you reach your future financial goals by guiding you through investment decisions for retirement, establishing an estate plan, coordinating financial transactions, completing trust funding and monitoring your financial growth. Make sure your financial advisor has the appropriate certifications and credentials like a Certified Financial Planner (CFP).

The accountant focuses on asset valuation, tax projections, tax planning, and other tax advice. This person will help you determine the tax impact from the sale or purchase of assets like a property or business. Looking for an accountant you should verify he or she is a Certified Public Accountant (CPA) that specializes in tax accounting.

The attorney works to make sure you have the appropriate documents for your medical directives, guardianship, establishment of a trust, caring for a minor child, asset protection, wills, and tax avoidance. When choosing an attorney, you need to confirm he or she handles the legal side of financial matters especially wills and estates.

The insurance agent will analyze and advise on whether you have enough insurance to provide for you and your family in the future. Your insurance agent should review your life, disability, and long-term care policies to ensure you have the appropriate coverage. The insurance agent helps in your financial planning by reducing the risks of future financial hardships.

Asking each prospective team member a few questions at the beginning can set you up for a healthy financial future. Some questions you can ask when talking with your advisors include:

• What are your credentials and specialties?
• Do you work in a team?
• How often do you meet with your clients?
• Are you willing to provide information and contact my other financial team members?
• How can you help ensure my other team members get the information they need?

If you already have an individual team member in place, let them know your plans on using a team-focused approach to managing your finances. Talk with them about the transferring of information and your expectations for your financial planning. Once you have decided on your team, you can keep planning for your financial future.

Circles of Support

As you make arrangements, consider who should know part, or all, of your plan. Think in terms of concentric circles with you and your partner at the center knowing everything, and others knowing just what is necessary. Only include those you deem most trustworthy and who can offer the proper support in the days and months after a loss.

Who belongs in your circle?

Here are some suggestions:

• You and spouse
• Adult children
• Siblings and other family
• Heirs and beneficiaries
• Guardians of any minor children
• Close friends
• Spiritual counselors
• Financial and tax advisors
• Estate attorney
• Executor of your will
• Other professionals

Documents Needed to Move Forward After the Loss of a Loved One

When someone dies, the process of settling their financial affairs is typically handled by you and members of your financial team, including your financial planner, estate attorney, and accountant, among others. The documents you’ll need to present to your financial team for them to begin the process of settling the estate (i.e., distributing assets to heirs and debtors) include:

• The will
• Letter of Instructions
• Trust documents
• Death certificate, usually a certified copy
• Life insurance policies
• A list of assets and liabilities
• A list of bank and brokerage accounts

Plan Carefully to Inspire Confidence

Planning for your own mortality or that of loved ones doesn’t have to be a gloomy task. On the contrary, it can be comforting to know that you’ve done all you could to benefit the next generation. Making planning a family affair may bring you all closer and likely will ease any confusion when the time comes.

As you think through these decisions, rely on your Signature Wealth Strategies financial advisor, estate attorney and other professionals to help you properly document your needs and wishes.

While we are familiar with the tax and legal provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.