Even those who have saved and invested well may not be sharing their financial information with a spouse or loved one. It's time to do that now.
A woman's brother is in a coma. No one in the family, even the man's wife, knows anything about his savings, investments, debts, or any financial matters. The family doesn't know who his financial advisor is, if he has a will or how much money is available to pay bills, which are piling up rapidly. When they did locate bank accounts, the family had to work with three different banks to get access to the money. At least there was a Power of Attorney in place, so bills could be paid. However, what else did he own? This is why it is important to consult with an Estate Planning Attorney to avoid similar problems.
The family's story, as related in the article “Someone Needs to Know Where Your Money Is” from Kiplinger, is not unusual. An estate plan with preparations for incapacity as well as death, shared with his wife or a family member, would have prevented many of these problems. What can you do if faced with this same scenario?
Finding the most recent tax return will yield a lot of information. This document will have the name of the person who prepared the return, if the person used a CPA. The tax return will also document income and possibly list some assets. Information like earned interest, dividends, pension income and withdrawals from retirement accounts will be on the tax return. If you know the name of the person's employer, call the human resources department, since they may be aware of a life insurance benefit or a 401(k) account.
The person in this example was admitted to the hospital and their health deteriorated so rapidly that there was no time to make any proper arrangements. We never know what the future will bring. Having an estate plan and gathering information on finances and assets—and sharing this information with loved ones—should be done by everyone. It is important to consult an Estate Planning Attorney for assistance.
Here are the documents most people need in case of incapacity:
- Will, Financial Power of Attorney and Trust Documents, if any exist
- Bank, Investment and Social Security statements
- Information for all online assets, including financial assets, websites, business accounts and cryptocurrency
- List of all Retirement Accounts, annuities and life insurance policies
- Cost basis of all investment in taxable brokerage accounts or stocks
- A list of any assets of value, including real estate and automobiles
- A list of debts, and
- Most recent tax returns.
Schedule B on a tax return can reveal some surprises for family members. If there are no paper records or log-in information to financial websites, ask the tax preparer for a copy of the 1099 form for each asset. Once the list is complete, put together the information, along with all insurance company information and the tax return, into a large envelope to be reviewed once a year.
Some estate planning attorneys keep original wills for clients, but not all do. Contact your estate planning attorney to find out what would happen if you became incapacitated and be sure to have the necessary documents created or updated, including a will, financial power of attorney, health care power of attorney and any trust documents. A copy of your Social Security card, birth and marriage certificates and your estate planning documents can go into a big envelope marked “Legal Documents” and placed in a secure location, also to be reviewed annually.
Tell your executor and trusted family members where these documents are, so they can be accessed when needed. They will be able to act on your behalf in the event of incapacity and you will have spared them unnecessary stress and expenses.
Call an experienced Thousand Oaks Estate Planning Attorney with questions. Book a Call
Reference: Kiplinger (Nov. 1, 2021) “Someone Needs to Know Where Your Money Is”