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Protecting Your Family Through Financial Planning

Protecting Your Family Through Financial Planning

May 17, 2023

Losing a spouse is a traumatic event that can make managing financial obligations feel daunting. This article provides a guide on how to create a financial to-do list for your surviving spouse, a proactive approach that will simplify their financial management when the time comes.

Four Keys To Protecting Your Family:

  1. Firstly, gather and organize all important documents, account details, and contact information for financial advisors;
  2. Secondly, keep beneficiary information updated and consider setting up transfer on death (TOD) provisions on your accounts to avoid probate;
  3. Thirdly, draft or update your will, considering both a living will and a last will and testament;
  4. Finally, ensure that life insurance is factored into your financial plans, making sure your spouse is aware of the coverage and any attached provisions.

Our guide underscores the importance of regularly checking and updating these elements, thereby reducing complications and providing peace of mind for your loved ones in a time of grief. Continue reading to discover how to protect your family financially through difficult times.

Why Does Planning For The Future Matter?

Planning for the future is crucial for numerous reasons, particularly in the context of financial readiness in the face of unexpected events such as the sudden loss of a loved one. This form of planning allows individuals to make important financial decisions in a calm, collected state of mind rather than under emotional stress or duress when decision-making capabilities may be impaired.

Preemptive financial planning, including discussions about lifestyle preferences, asset division, life insurance, and a comprehensive understanding of household assets, income, and bills, reduces the risk of financial turmoil or legal complications following a spouse's sudden passing.

Moreover, such preparation ensures the surviving spouse can focus on grieving and adjusting to their new life without the added worry of financial instability. The process of future planning, therefore, provides a financial safety net, ensuring that surviving spouses and children are taken care of in terms of daily living costs, potential college tuition, and retirement.

Furthermore, securing life insurance when in good health is typically more affordable and possible than when it is urgently needed. In essence, planning for the future matters because it provides peace of mind, financial security, and allows for a smoother transition during life's inevitable changes and challenges.

organizing folders

How Do I Get & Stay Organized When Considering My Family's Future Finances?

Financial planning for your family involves multiple steps, and staying organized throughout the process is key. By following these steps, you can create an organized financial plan that will protect your family in the event of an unexpected loss and help ensure their financial stability for the future.

Here's a step-by-step guide:

#1 Create a Comprehensive List

Begin by creating a master list of all your accounts and assets, including bank accounts, investments, real estate, and any other valuables. Note the institution or bank where they're held, along with the approximate balance. Also include login information for digital accounts.

#2 Gather Important Documents

Collect all critical files and documents, such as property deeds, vehicle titles, investment account paperwork, insurance policies, and more. Keep these in a secure place like a safe deposit box or fire-proof safe.

#3 Update Regularly

Review and update your list of accounts, assets, and documents annually to ensure that the information remains accurate. This should include checking beneficiary designations and making necessary changes based on life events like marriages, divorces, or births.

#4 Draft & Review Your Will

Create a living will and a last will and testament. Regularly review and update them as needed. A living will outlines your treatment preferences if you become incapacitated, while a last will and testament details how your assets should be distributed after your passing.

#5 Consider Life Insurance

Life insurance is a key component of financial planning. It's crucial to understand how much coverage you have and how it should be utilized upon your passing, such as covering final expenses, providing replacement income, or funding children’s college tuition.

#6 Prepare for Estate Transfer

To avoid a lengthy and costly probate process, consider setting up Transfer on Death (TOD) provisions on your accounts.

#7 Get Professional Help

Enlist the help of a financial advisor to walk you through all the scenarios you should prepare for. They can provide guidance tailored to your unique financial situation.

#8 Communicate Your Plan

Ensure your spouse and a trusted family member or friend knows where to find your important documents and understands your financial plans.

#9 Use Tools & Resources

Utilize financial planning tools or templates to help you stay organized. For instance, a spreadsheet or financial planning software can make it easier to track and manage your finances.

#10 Stay Proactive

Remember, the goal of financial planning is to prepare for the future. Don't wait for a crisis to happen before you start planning. Being proactive can give you and your family peace of mind and financial security.

updating will

How Do I Draft Or Update Beneficiary Information & Will?

Drafting or updating beneficiary information and your will is an essential part of estate planning. Here's a step-by-step guide on how to do so:

#1 Identify Your Assets

Begin by creating a comprehensive list of your assets, including bank accounts, retirement accounts, life insurance policies, real estate properties, and other valuable possessions.

#2 Choose Your Beneficiaries

Determine who you want to inherit your assets. This can be your spouse, children, other family members, friends, or even charitable organizations. If you have minor children, consider setting up a trust for their inheritance.

#3 Update Beneficiary Designations

For assets like life insurance policies and retirement accounts, you typically designate beneficiaries directly. Contact your insurance company or retirement account provider to update your beneficiary designations. Remember, beneficiary designations take precedence over instructions in a will, so ensure they're current and align with your wishes.

#4 Draft Your Will

In your will, you specify who will inherit your other assets, such as real estate, personal property, and bank accounts. You also name an executor who will carry out your wishes. If you have minor children, you can designate a guardian for them in your will. It's advisable to work with an attorney to ensure your will is legally sound and reflects your wishes accurately.

#5 Review Regularly

Life changes, such as marriage, divorce, birth of a child, or death of a beneficiary, may require you to update your will and beneficiary designations. Aim to review these documents at least annually and update them as needed.

#6 Get Professional Help

Estate laws vary by state and can be complex. Consider consulting with an estate planning attorney to help draft your will or update your beneficiary information. They can provide guidance tailored to your unique situation and ensure your documents comply with the current laws.

#7 Communicate Your Wishes

Once your will is drafted and your beneficiary designations are updated, communicate your wishes to your loved ones. This can help prevent misunderstandings and disputes after your departure.

Why Meet With A Financial Advisor?

Financial advisors are able to transform your personal economics and future plans. Financial planning, investment techniques, tax legislation, and insurance are their specialties. Their specialized guidance may help you manage your specific financial position and goals. They help you create a financial plan that covers retirement savings, children's education, tax management, and unexpected life events. This thorough approach covers all financial factors.

Financial advisors handle investments, estates, and planning for the future. They guide your investing strategy by analyzing your risk tolerance and financial objectives. Advice is provided on asset allocation, investment selection, and portfolio rebalancing. They also advise on tax reduction and asset distribution in estate planning.

Accountability from meeting with a financial counselor may help you reach your financial objectives. Financial advisors help you stay on track and achieve your goals. They provide you peace of mind by managing your funds professionally, letting you concentrate on other things.

Who Offers Family Financial Planning In Flagstaff?

In conclusion, proactive financial planning can significantly reduce stress and provide peace of mind for you and your loved ones. If you're in Flagstaff, Arizona, and seeking expert guidance in managing your personal finances, look no further than Benefit & Financial Strategies.

With our vast expertise and personalized approach, we can help you navigate the complexities of financial planning, ensuring your financial goals are met efficiently. Don't wait for tomorrow to secure your financial future. Contact Benefit & Financial Strategies today for a comprehensive consultation. Your journey towards financial stability and prosperity begins here!