The importance of being prepared

Beyond having a financial goal and a well-balanced portfolio, it’s also important to make sure you don’t have gaps in your overall financial plan. When I work with clients, one gap I often see is in their estate planning. Having an estate plan is such a crucial component of managing your investments, but I’ve found that clients are often reluctant to address it. I can understand why—it can be challenging and uncomfortable to think about your death. While it’s easy to push estate planning out of your mind when you’re still young, in my experience it’s better to begin planning early. This way, you can set your loved ones up for success when the time comes.

One night in early July, as my wife and I were preparing for bed, we had unexpected visitors. Police officers showed up on my doorstep to inform me that my elderly aunt had passed away in her sleep. As the executor of her estate, I knew what my aunt’s wishes were and I’d thought I was prepared for this moment. But I soon realized just how much there was to do.

I was on the phone for what felt like hours that night, speaking with the police, contacting a funeral home, reaching out to members of my family to inform them of what happened. In the days that followed, I made decisions about the funeral home, visited the local courthouse, dealt with utilities and spoke with creditors. Needless to say, it was much more involved than I’d anticipated. After having experienced this firsthand, I now have a different understanding of this process. I was so grateful to all who were kind enough to help me, and I’d like to help you too.

Ensure your wishes are met

Before my aunt passed away, we met several times to discuss her estate and she was very clear about her final wishes. The detail of these conversations greatly helped me later, when I was able to execute her estate the way I knew she wanted. When you have these conversations with loved ones, it’s important to ensure all your details can also be referenced clearly and easily.

It’s also a good idea to draft a will or similar legal document. Without a will in place after your death, your assets could pass through your state’s probate process, a lengthy procedure that sometimes fails to divide your assets per your exact wishes. You also might want to consider a living will. While it might be unpleasant to think about, there may be a time when you won’t be able to make these decisions on your own. A living will, which concerns important medical care decisions, can empower a loved one to make these decisions on your behalf.

It’s worth taking the time sooner rather than later to outline in detail what you’d like to happen. What are your final wishes? Unless they’re really discussed, it can be tough for your loved ones to understand and act on them. These preparations don’t have to be complicated or expensive, but when the unexpected happens, you need to have these documents in place.