No one plans on getting sick or becoming disabled, but ironically, planning for these potential life-altering events is exactly what you should be doing.
When a family member or close friend experiences an unexpected death or debilitating illness, important planning questions may immediately come to mind: Who is the first person to contact? Who has the authority to make medical decisions or funeral arrangements? Did this person oversee their family finances? If so, who now has the authority to make these decisions? Is there an inventory of all financial accounts and legal documents?
Making decisions, delegating responsibilities, and documenting information can be incredibly challenging in the height of a difficult emotional event. Without adequate planning, the grief of an unforeseen tragedy combined with anxiety around quickly getting a loved one’s affairs in order can result in hasty and panicked decision-making. The outcome in this case may be very different from what would have been decided given more time and a clear mind. Fortunately, there are several steps you can take to better prepare yourself (and your loved ones) for such unforseen situations.
Identify the Right Person
The first step in planning for the unplanned is establishing a primary contact – the person your advisor will turn to should there be questions or concerns about your health status or cognitive ability to manage financial affairs. This can be an immediate family member, close friend, attorney, accountant or clergy member.
Ask the Right Questions
Difficult as it may be, ask yourself questions about your future in the event of illness or incapacitation, and discuss your answers with the appropriate planning professionals. These questions may include things like:
- How will you maintain your current home in the future?
- How will you ensure your ability to come and go as you please?
- Will you live in a community near family and friends?
Many times, these questions lead to deeper discussions about future concerns that you may not have considered before.
Have the Right Documents
It’s important to maintain updated versions of financial, legal, healthcare, and insurance documents. Keep track of these items by using a checklist, such as the Documenting the Essentials checklist below, which lists these essential documents, explains each one’s importance and captures its current status.
Unexpected illness and death cannot be controlled or predicted; however, talking to your advisor about these important planning steps can provide a greater sense of preparation and control over how important matters will be handled in light of an unplanned event.
Documenting the Essentials Checklist