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September: A Good Time to Ask "What If?"
September is often thought of as a month of transitions. Summer is ending, children are returning to school, and we begin looking toward the final months of the year.
For those of us approaching or enjoying retirement, September can also be an ideal time for a different kind of transition: taking a fresh look at our financial and estate plans.
Not because something is wrong--but because circumstances change.
Your investments may be different than they were five years ago. Your children may be adults with families of their own. Your retirement income may now come from different sources. Perhaps you have acquired a vacation home, sold a business, received an inheritance, or simply accumulated more wealth.
And there is one question that deserves particular attention:
What happens if you can no longer make financial decisions for yourself?
Most people have an estate plan designed for what happens after death. But the more immediate concern may be what happens during life if you become temporarily or permanently unable to manage your financial affairs.
Who would pay your bills?
Who would manage your investments?
Who would communicate with your financial advisor?
Who would deal with your bank, insurance companies and other financial institutions?
Who would make sure your property is maintained, and your taxes are paid?
And perhaps most importantly, who would make those decisions in the way you would have wanted them made?
Many people assume their spouse or children can simply step in. Unfortunately, it may not be that simple.
A Power of Attorney can provide important authority, but it depends heavily on the person you appoint. That person may be perfectly trustworthy but may not have the time, experience, or desire to manage substantial financial responsibilities.
A properly designed trust can provide another layer of continuity.
Your Plan Should Work While You Are Living
For individuals with significant assets, estate planning should not be viewed solely as a way to distribute wealth after death. It should also be viewed as a plan for financial continuity during life.
A well-designed trust arrangement can establish who will manage assets if you become incapacitated and provide a framework for how those assets should be managed and distributed.
It can also reduce the burden placed on family members at an already difficult time.
This becomes particularly important for individuals who are widowed, divorced, living alone, or who simply do not want to place the responsibility for managing their financial affairs on a child.
September Is a Good Time for a Checkup
As we enter the final months of the year, consider reviewing four basic questions:
1. Are your estate documents current?
Your will, trust, Power of Attorney and health-care documents should reflect your current circumstances.
2. Are your assets properly titled?
A trust can only accomplish its intended purpose if the appropriate assets are actually connected to it.
3. Are your beneficiary designations current?
Retirement accounts, life insurance and other assets should be coordinated with your overall estate plan.
4. Who takes over if you cannot?
This may be the most important question of all. Make sure the person or institution you have selected is capable of managing your financial affairs and understands your wishes.
Planning for the "What If"
None of us knows what the future will bring. That is precisely why planning matters.
The goal isn't to anticipate every possible event. It is to make sure that if something unexpected does happen, your financial life does not have to be rebuilt in the middle of a crisis.
September provides a natural opportunity to step back, review your plan and ask the questions that are sometimes easiest to avoid.
What if I become incapacitated?
What if my spouse becomes incapacitated?
What if my children must step in?
What if no family member is available--or willing--to take on the responsibility?
A good estate plan answers those questions before they become urgent.
Because the best time to plan for "What If" is when there is no "What If" yet!
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