Thursday, August 2, 2012

Affairs to Remember

I read an interesting article the other day titled, “What You Owe Your Loved Ones.” by Manal. It had three sections and for today’s article I focused on the section on organizing your family and financial affairs.

financial planA few years ago I wrote a financial planning guide about preparing for early retirement. Manal’s article discusses some of the topics in the guide plus some other considerations. I cannot emphasize enough how important it is to ‘put your house in order’. It could be one of the greatest acts of love you will ever do for your family.

Arrange your affairs
Right now I feel that not only do I have an obligation to leave my finances in the simplest form possible but also all of my affairs. The more organized and clear you are about what would happen after you’re gone, the easier it is for your family to deal with it—and that is an act of love and kindness on your part that they will appreciate.

To organize your life start with the following actions:

A. Simplify your finances. I will write about this in more detail in the future but for now focus on these two steps:
  • Prepare a list of your bank/investing and retirement accounts. Write down the access codes and details that someone would need to know.
  • Create another list of the bills you pay and online access if needed. Add to that list any loans/mortgage you have.
Between those two lists someone should be able to tell what you own and owe. Don’t leave these documents on your computer. Keep a physical copy, preferably with your will.

B. Simplify your possessions. If you have a lot of stuff that you think would be a pain for your loved ones to deal with, get rid of as much as you can now. Use the usual system of throw out, give away, or sell.

If you want to keep some stuff to give away after you’re gone, organize such items in a way that can be easily picked up and make sure to include the instructions in your will.

C. Prepare a will. This is something I did a few years back. It was tough towill do I admit. No one likes to think about death and its aftermath. But if we want to be honest with ourselves, it’s going to happen no matter what. The sooner we accept this fact the better.

In your will you will address the disposal of your possessions, name your executor and beneficiaries as well as specifying funereal arrangements. Your will can be modified any time.

If you don’t have an overly complex estate, you can buy one of those legal kits and use it or you can work with a notary public. If things are more complicated, spend some time and money working with a professional to get your affairs in order.

D. Consider a living will. I’m not sure what the legal term would be in other countries. Also, this document may not be legally enforceable. But it can give your loved ones clarity about your wishes.
living-willIt basically states what you’d want if you ever need life support and if you don’t wish to be kept alive by artificial means.

This is one of the toughest documents to sign, but it’s a relief for you and your family. They’ll appreciate you absolving them from making one of the most painful decisions.

You may also add a power of attorney naming someone to act on your behalf if you don’t have a next of kin. Please note that a power of attorney won’t be valid after death. It’s useful in situations when you’re alive but incapacitated.

Arranging your affairs is something that might trigger pain and fear. But it is worth it; you’re doing it to make life easier for others around you. It’s a wonderful act of kindness and love. Remind yourself that the peace of mind is worth the pain of getting a few things done now.

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