Life has a funny way of throwing surprises at you. This happened to my husband’s family recently. My Father-in-Law was diagnosed with Lewy’s Bodies Dementia this summer. Things have gone down hill rapidly and he is no longer of sound mind, leaving financial responsibilities solely upon my Mother-in-Law’s shoulders. While this is a lot for her to take on upon her own, the good news is that they were prepared. They had all of their financial records in order. They had already signed all of the necessary legal documents completed.
Watching what they went through made my husband and I take second look at the things we would each have to take care of, should the unthinkable happen. Fortunately for us, we are prepared. However, many people are not. Some don’t know where to start. Others are not even sure what they should make sure they have taken care of. That is why I want to help. Below you will find my tips to help you plan for the unexpected — including forms you can download to help you ensure you take care of the things you need to.
This list is not one that is fun. It is not one that will save you a ton of money. What this list will do for you is give you something which is priceless — peace of mind. Just knowing that your family is taken care of, should something happen to you is a great feeling.
1. EMERGENCY FUND
Make sure that you have a minimum of $1,000 cash in the bank. This will help you if the car breaks down and prevent you from being tempted to accrue debt in order to cover your expenses. In today’s economy, a fully funded emergency fund should have at least 6 – 9 months of living expenses saved. That may sound pretty extreme, but if you or your spouse happened to lose your job, this will help carry you through the hurdles. Finding a new job can be tough. It can be even tougher if the unemployment checks run out. This will give you peace of mind to know that you can take care of your family if your financial situation changes.
2. COMPLETE AN INSURANCE CHECKUP
Insurance is something that so many just don’t have. And I am not referring to health insurance, I am talking about life insurance. Think about this, if something happened to you or your spouse, could you survive financially? Could you cover the mortgage? Could you pay for college for your kids? Take the time to visit with a reputable agent who can help you determine how much insurance you need. Make sure that you include contingent beneficiaries, should something happen to the main one listed on the policy. This is something you do for your family more than you do for yourself.
3. SIGN A WILL AND OTHER LEGAL DOCUMENTS
I hear people say that it is so expensive to have attorney complete one for you, but you can actually do it yourself. You can find several free resources online to help you complete the forms or you can purchase something (like Willmaker). Print and take them to your bank to sign and have them notarized. Make sure that you make a copy for yourself and keep your original in a bank vault or safe.
The legal documents you should consider in addition to your will are a Power of Attorney and Health Care Directive (Living Will). These forms could be necessary in the case of an accident. Make sure that the original forms can be easily accessible by the Exector.
You need to have a will, especially if you have children under the age of 18. If something happened to both of you, who would take care of them? They process could be a nightmare for them. The greatest gift you can give your children is to know that they will be with someone who can take care of them, should the unthinkable happen. Just make sure that you review the laws for your state, as they do differ.
4. GET A SAFE DEPOSIT BOX
The cost of a safe deposit box is minimal. The annual fees range from $30 – $80 (depending upon the size of your box and your bank). When you set up the account, make sure that both you and your spouse have access. You will also want to make sure that you allow access to one other person who does not live with you. That way, if you are both unable to get to the box to retrieve papers or forms, someone else will be able to act up on your behalf.
5. HAVE A FINANCIAL MEETING WITH YOUR SPOUSE (SIGNIFICANT OTHER)
In many relationships, one spouse usually handles the financial affairs. What would happen if that person was injured, sick (or worse) and could not be there to address those issues? Sit down with your spouse or significant other and have a financial meeting. During this conversation, work together and make a list of all of your important financial information including banks, credit card companies, life insurance, investments. If any of these are accessible on-line, make sure you include the login and password information. It might be good to log into each one together to go through the process to ensure you both know how to access them. Create a list that includes all of the following information:
- Account and contact information for all financial institutions (include banks, investments, retirement accounts)
- Life insurance policy and contact information
- Account information for all credit card companies
- Contact information for financial advisor, attorney, and CPA
- Contact information for HR department at work
- Location of safe and/or safe deposit box
- All families full name, dates of birth, social security information and driver’s license numbers
- All login information to all accounts – including lost password information such as maiden names, college mascots, etc.
During this same meeting, discuss the location of important documents. Ensure that you both have access to these papers should they be needed. You should also review all of the documents to make sure that the beneficiary information is up to date. If you have children, you may want to add him/her as a contingent beneficiary as if something happened and they were not listed on the policy, he/she would not have claim to the money.
I have created forms, which you can download for free, to help simplify this step. You can find the following:
- Websites & Passwords List
- Important Contacts List
- Financial Records / Contacts Form
- Forms Location (where to find all of those important documents)
Most important of all, talk to your spouse and/or family members. Make sure that the lines of communication are open and you both know these things. Knowledge is power and can save so much in the face of emergencies and tragedies.