The definition of “family” is more fluid than ever. It’s common to hear of second or third marriages. It’s more socially acceptable for people to cohabitate with a partner without being legally married. Children may live with or be raised by people other than their biological parents. Brothers and sisters are often step-siblings or half-siblings.
The technicalities of these relationships do not define how families love one another. They could, however, define what happens when a loved one dies or is incapacitated. It’s uncomfortable to talk about those situations, particularly when your family structure is complex. But I know two things for sure:
- None of us get out of this world alive,
- And everyone needs some level of estate planning.
Picture this. Your grandmother has passed. Out of seven grandkids, you are the one who was her caregiver for the last ten years. The other grandkids never came around or helped her out in anyway. Grandma so appreciated the dedication, love and care you had shown her that she wanted you to have her house.
It’s a small house, but the mortgage is paid off, and you’ve personally seen to the upkeep, as it’s been your only home for the last ten years. However, Grandma’s will only indicated she was leaving everything to her grandkids. The house is eventually sold, with the profits divided seven ways, and you’re looking for a new place to live.
This type of situation happens all too often, despite being completely avoidable. We’d all like to believe that family members would be reasonable with each other, and in some cases, that probably works out.
Grief is a funny thing though. It brings up old pains and ghosts from the past. Relationships can be destroyed because someone didn’t have or didn’t update their estate documents.
Does your family – however you define that – know who you have put in charge of making decisions if you cannot? Do they know what assets are intended for whom? If the answer is no, or if you are not sure, you can take a few simple steps today that could help avoid bad feelings, financial burden and a stain on your legacy.
At a minimum, you need a will and powers of attorney, both financial and healthcare. If you already have those set up, proceed to Step Two. If you have nothing in place yet, contact an estate planning attorney. Your financial advisor can help you identify a reputable professional.
Create a comprehensive list that outlines where these estate documents and important papers (life insurance, birth certificates, etc.) are stored, and include information about passwords, accounts, financial professionals who serve you, and wishes for your funeral arrangements. Plancorp offers a free guide you can download to help you create this list.
Keep this comprehensive list up to date. Kids grow up. Situations change. A good practice is to revisit the list every two years and update it as appropriate.
An estate plan is a key part of meeting your comprehensive financial planning needs. Being proactive in communicating the plan to your loved ones and memorializing the plan with your attorney will ensure that your wishes are carried out in the way you desire.