Will 2014 be the year you do the right thing for yourself and your family by creating a secure financial future? Here are four steps to help you begin to take control of your financial life now:
Be willing to consider the worst.
Many people neglect their financial affairs because they are uncomfortable thinking about the scary parts of life and especially the impermanence of it. But in order to create a great financial life for you and the people you love, you must consider the worst possibilities, including your own death.
The process of looking at what would happen to everything you love is way more about living than it is about dying. Consider the worst so you and your family keep control of your finances and make important choices about how you want your assets managed and passed on to future generations.
Inventory your assets
Create a comprehensive list of all your assets and keep it up to date on at least a yearly basis. If you keep and update your inventory, you will always know what you have, your loved ones will know what there is if anything happens to you, and nothing you care about will end up in the State Department of Unclaimed Property with billions of other lost assets. Most importantly, your loved ones will feel significant ease knowing you are on top of what's most important. You handle this and they relax.
Assets include not only cash and investments but also real estate, insurance policies, annuities, retirement accounts, collectibles and also intangible assets, such as digital assets, such as your photographs, emails, and even your Facebook content, values, insights, stories and experiences. We can help you inventory and pass on those as well.
Once you have compiled your inventory, you can then start thinking about how each asset serves you and who you want to benefit from each asset you intend to pass along, whether it is a relative or a favorite charity, and how you want them to live beyond you.
Create a plan to handle them well, no matter what.
One of the most important parts of financial security for your loved ones is knowing that they can access your assets and know how to handle them if something happens to you. While most people think a Power of Attorney legal document is sufficient, it's really not.
It's just the authorization of who you want to make your financial decisions if you cannot make them yourself, but it doesn't tell anyone HOW to make those decisions. What are your values? How do you decide what to invest in? How to invest? How to make the hard choices in your financial life?
Assigning powers of attorney and declaring how you want your financial life handled is important for people of all income levels, because these are the people you choose to carry out your wishes in the event you are unable to make decisions for yourself.
Keep your plan updated.
Without a doubt your life is going to change, your assets are going to change, and, yes, the law is going to change. So it's key to re-evaluate your financial security plan at least once a year to ensure the decisions you made still make sense. This is especially critical after a major life change such as a marriage, divorce, birth of a child or death of a beneficiary.