At any age, it is impossible to imagine a time when we will be unable to care for our finances, let alone ourselves. Most of us want and enjoy being self-sufficient in our lives. We surely don't want anyone finding out about our money dealings. But what if you got unexpectedly ill or incapable, either mentally or physically? Who would manage your money, pay your bills, and ensure that you had adequate healthcare? Are you and your family ready to deal with the fact that you can no longer manage your finances?
Start gathering your finances and other vital documents when you can still think clearly and are in good health. Determine who in your life will be the designated financial and health carers in the future. Engage a family member or friend in the first discussions and process before it becomes an emergency. In any situation, be sure that they are trustworthy individuals.
Essential Questions to Ask Your Designated Caregivers
What would your chosen carers need to know to care for you and your financial affairs if you were hit by a bus and became mentally and physically incapacitated?
Do you have a power of attorney in place?
A durable power of attorney specifies who will handle your affairs if you cannot make decisions for yourself due to mental or physical incapacity. For example, you can appoint one person to take health care decisions (the health care proxy) and another to make money decisions (the financial broker), or you can appoint the same person to undertake both tasks. Without a durable power of attorney, your essential caregivers will have to seek guardianship to access your accounts. This will take time and could turn into a legal nightmare.
What are your monthly outgoings?
To avoid fines or worse for failing to pay your monthly bills, provide your chosen caretakers with a list of your monthly expenses, including your mortgage, car payment, credit card debt, electric and water bills, and other obligations.
What are your bank account numbers and financial institution names?
What do you do with your money? What are the specifics of each account number, including the bank's name? What is the name of your mortgage company? Do you own an investing company? Consider combining your accounts into one or two key financial institutions as a best practice to keep things easy.
What is the location of your financial records?
What is the location of your financial records? Do you store them at a bank, a safe, or a particular place at home? Where can I find keys or codes for lock boxes or safes? What are the most important passwords for primary online resources? If practicable, maintain a secure and central location for all critical papers and information.
How do you now pay your bills?
Do you have automatic withdrawals from your checking account? Do you pay your bills online or with paper checks?
How much money do you make each year, and where does it come from?
Do you get a monthly pension or Social Security? Do you receive dividends or annuities from your investments? Do you get disability, alimony, or other forms of assistance?
What type of medical insurance do you have?
Do you have employer-provided health insurance? Are health benefits included in a pension if you are retired? Do you have Medicare or Medicaid supplements?
Have you considered purchasing long-term care insurance?
A "standard" health insurance policy will not cover the expense of assisted living or nursing home care. Do you have long-term care insurance to cover the cost of such homes? If not, and you can no longer live alone, how much housing can you afford?
Do you work with an accountant or a financial planner?
Who is it, and how can you get in touch with them? Have they made any plans for their estate? Do you have a Will and/or a Living Trust in place?
Plan ahead of time to avoid severe issues afterwards. Ensure that your legal and financial documents are organized in a safe and secure area, that their content and location are communicated to your chosen caretakers, and that all communication is clear and direct. The more prepared you are, the easier it will be for others to focus on your well-being without enduring the emotional and legal nightmare that would await them if you do not. Preparing for the unavoidable is one of the finest gifts you can give yourself and your loved ones.
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