Common Pitfalls

Every family, every year, should be sure to train itself to be prepared for the worst of circumstances. Yet, most people do not bother to take the essential measures.

Many do not have adequate amounts of life insurance. Others neglect their wills. Many people with complex needs have only a simplistic will when a carefully drawn trust is really needed. Some haphazardly purchase financial products and have no overall financial plan.

Every estate is planned, either actively or passively. Either you maintain control, or the government does it for you. If you do not bother, your family may suffer undue duress and expense due to protracted court proceedings. You can avoid all this by planning ahead.

Reason to Plan

In the case of a minor child or elderly parent For example, You would not think of leaving them alone without a baby sitter. Nor would you allow someone else to decide who that baby sitter should be. it is important for you to specify a guardian (and alternate guardians) in your will.

Your spouse or family members cannot be expected to know all your financial arrangements. You can save them a lot of anguish by keeping records current, including bank account numbers, insurance policies, real estate deeds and records, stocks, bonds and other investments, wills, trust agreements, employee benefit records, birth certificates, marriage license, military service records and Social Security information.

Employee benefit accounts and beneficiary arrangements change frequently, and often it is appropriate to change prior elections.

It is essential to keep an inventory of all your property, mortgage information and an informal letter of instructions regarding estate administration.

It is also important to make sure you are doing everything possible to assure adequate income at retirement. Take full advantage of savings, investments, insurance, individual retirement accounts and all the products and services available to you. Your professional financial advisor may help you understand the advantages and disadvantages of each.

Special Arrangements May be Needed

You owe it to yourself and your loved ones to become informed, and to teach your survivors now, how to make decisions and handle money. Maintaining your financial safety often means that you or your spouse, if you are not well, may not be able to handle money, run a business or manage an investment portfolio. It would be unfair and unwise to thrust these burdens on the wrong people.

If you have a mentally challenged, learning disabled or physically handicapped child, you must plan ahead. Such children may never be able to care for themselves. The same might apply to a parent or dependent sibling. Such cases call for special legal arrangements, and frequently require special funding efforts to be effective.

Every closely held business owner should consider what will happen if a business associate dies or becomes disabled. What will happen to your survivors if you meet with an accident? Could your spouse or children take over if they had to?

Would you want them to? If there are no written, binding plans, could the wrong employees take control?

Suppose you are single. Who will act for you later, if you do not act for yourself now?

You may have important charitable objectives. Government cutbacks have shifted some responsibility for social services back to the public, and many worthwhile organizations have a great need for funds. You may be contributing time and money now – what about a legacy after your death?