As we zoom through life we live for today, without much thought for tomorrow. We take care of what is in front of us. Yes, we know there is no guarantee that you will be alive tomorrow. Yes, accidents, cancer and heart attacks happen, but to others not us. In reality, we do not know when our time is up.
Therefore, instead of ignoring the possibility that your number will be called, consider taking a few steps to protect your loved ones.
- Who will take care of your children? If you have young children, name a guardian or possible guardians in your will.
- Do you have financial means or life insurance to provide for those you leave behind? They estimate it will cost $241,080 to raise a child born in 2012. The annual cost for a child in a middle-income, two-parent family ranges from $12,600 to $14,700. How much do your children count on you to provide for them in the coming years?
- What will happen to your business, if something happens to you? If you have shareholders, do you have an agreement that will provide a financial value for your investment? If you are the sole owner, do you have arrangements with someone knowledgeable in your business to step in and buy the business, prepare it for sale or close it and complete the legal and tax obligations?
- Do have your critical and essential websites and passwords documented? Everything is going to the cloud. The angels above will not be much help to those left behind to unlock that information.
- What experiences do you want to have before you die? Start planning now. Do you want to take your grandchildren to Disneyland? Visit Hawaii? Wander through the Smithsonian museums? Or experience an African safari?
Next, organize your records and review them once a year. Include items such as:
- A copy of your will or trust document. Is it up to date and valid for today?
- Create or update a list of your personal assets.
- Review your life insurance policies and beneficiary statements. Verify that they are current.
- Create or update your list of advisors, beneficiaries and family members contact information.
- List of where you want your personal belongings to go, if not stated in your will. Consider sharing them now.
- Did you write letters and say the last words you want to tell those you love.
- Write down your personal preferences on your burial, plan it or pay for it in advance.
- Have you created a health and/or financial power of attorney available if needed?
It does not matter if you keep the documents in your safety deposit box, fireproof safe, in the cloud, or under your bed. The most important element is to tell someone where your documents are.
Once gathered, you can evaluate how complete it is. Create a plan of action to maximize your financial resources, minimize death taxes, avoid probate, and most of all – maintain control over your life and protect your family.
Do you need assistance gathering your information? Want to discuss your options. Maybe you are preparing your business for a transition. Give us a call. At FOCUS CPA, we help business owners live life their way.
By Mary Guldan-Lindstrom, CPA