Tuesday, 21 November 2023 13:40

Are Your Affairs in Order?

By David Rath, CMT, CFA | News
Are Your Affairs in Order?

My wife turned to me and said, “I wouldn’t know what to do if you died.” I had just gotten off the phone with my father who was simultaneously mourning the sudden loss of his brother and trying to sort out his finances. Talk about a wakeup call. As a financial professional, I’d like to think that I’m ahead of the game regarding this sort of stuff, but her comment made me realize I could do better. I handle the family finances and as a result, had inadvertently left her in the dark as to what would happen in the worst sort of circumstances. Let’s examine a few simple things you can do to prepare your loved ones.

The first financial question that arises when someone passes is “ok, what did they have going on?” Accounts, passwords, investments, debts, real estate, beneficiaries, the list goes on. This burden of data gathering will often fall to an executor named in your will. If there is no clear instruction or executor for an estate, the presiding court will determine a willing individual. Think about this for a second. If you suddenly leave this Earth, someone who you care about will have to deal with the emotional stress of losing you and the mental stress of getting your affairs in order. An organized list of financial accounts, updated annually, can greatly decrease this burden.

Do you have an estate plan? According to a survey by Caring.com, 2/3 of adults in this country do not currently have a will. I get it – it is not the most fun thing in the world to think about and it costs money, so it is easy to push to the back burner. The alternative is not great. Anything with a beneficiary designation like a life insurance policy is cut and dry – everything else is up for debate and probate courts and attorneys may spend a good amount of their time (and your money) to figure out who gets what. Speaking of beneficiary designations, are yours up to date? It is not a great look when an ex-husband gets a life insurance payout after his former spouse has remarried. Again, an annual review of this is recommended.

An alternate angle to approach this topic is one where you become incapacitated but have not yet passed. A health care proxy allows someone you designate to make medical decisions for you. These decisions range from acceptable treatments to measures taken to sustain life. It is pretty heavy stuff so make sure the person you name is someone you trust and willing to accept that obligation. Related to the health care proxy is the idea of naming a power of attorney to take care of your financial affairs while you are incapacitated. A few difficult conversations and proper paperwork instituted before anything happens can save a lot of angst during a stressful period of time for all involved.

Day in, day out, we see very little variation to our routine. Wake, coffee, school/work, home, bed, rinse, repeat. During this repetition, it is easy for our minds to become numb to the reality that everything can end in an instant. The Stoics have a helpful phrase to remind themselves of this stark reality: memento mori. Translation: remember that you will die. If that is jarring to think about, it’s because it is supposed to be. I have used this experience to better prepare my family for my absence. My hope is that you will use it as motivation as well.

David Rath, CMT, CFA, is the Chief Investment Officer at Continuum Wealth Advisors in Saratoga Springs.Continuum Wealth Advisors, LLC is a Registered Investment Advisor registered through the Securities and Exchange Commission.

For more information, visit contwealth.com.

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