Retirement Guys: Life is unpredictableWritten by Nolan Baker Mark Clair | | firstname.lastname@example.org
One thing that is absolutely certain about life is that it is unpredictable. Even the newest edition of the royal family, His Royal Highness Prince of Cambridge, doesn’t know how many years he will live. Despite his family’s royal status, he’s just like you and me when it comes to predicting how many years we will have with our loved ones and friends.
The Center for Disease Control reported that 2,468,435 people died in United States in 2010. Some of those more than 2 million individuals got to spend time with loved ones knowing that death was coming while others, like Princess Diana, lost their life in an instant. Some of those deaths were a normal part of life, while others were bizarre and hard to understand.
I, Nolan, know the emotions involved with losing a family member, a friend and even complete strangers. The entire grief process deserves another column probably written by someone who is a specialist in the field of grief. Yet, what I have learned as an investment professional working with my partner, Mark Clair, is that there are several financial and legal steps the surviving family members need to take after losing a loved one. We will share four steps survivors should take in that process.
- 1. Locate Critical Documents.
In some cases, this information will be very organized and easy to gather. Other times it will take some work. Gather this information and begin to organize it in a neat filing system that includes:
- Several certified death certificates
- Estate planning documents, such as a will or a trust
- Insurance policies, such as life, annuities, long-term care, health insurance and home and auto insurance
- Financial statements, bank records, bills and investment statements
- Tax return for the past year
- 2. Create a Financial Inventory.
Once all of the important critical documents are collected, it can be overwhelming. The financial inventory will be used as a summary and should include:
- Company name
- Account ownership, individual, joint tenants with rights of survivorship, etc.
- Account number
- Type of Account, IRA, life insurance, annuity, bank, etc.
- Contact information
- Investment or benefit value
- Income sources of deceased
- Bills of deceased with due dates
- Contact status
- 3. Contact Various Organizations.
Important time lines need to be followed for certain financial and estate planning parts of the process, but in general you don’t have to be in a hurry. We suggest you take time to think through what is best for you and the other surviving members of your family in the long term. Here are a few of the places to contact:
- An attorney who focuses on estate planning
- An independent licensed investment professional and/or insurance agent
- The Social Security Administration
- Current and past employers’ benefits department
- Banks, credit unions and investment companies
- Home and auto insurance companies
- 4. Initiate the Estate Settlement Process.
Be patient during this process. Some accounts such as life insurance can be settled in a few weeks. Other times it could take months or years to finalize the entire estate. It is a journey.
It is a good idea to make sure if there is a surviving spouse or dependents that enough liquid cash reserves are in place to cover income needs and expenses for the next six to 12 months. For example, if credit cards, bank accounts and investments accounts are going to be closed and new accounts opened, it will take time for this process to get completed.
Take extra caution when closing out retirement accounts, such as IRAs, 401(k)s and annuities. Special rules and strategies might be available to help avoid immediate taxation. Make sure all of the payout options are explained and understood. If you are a surviving spouse or dependent, update any beneficiary designations that were left to the deceased.
No one likes to think about our lives coming to an end. However by taking a couple hours to organize the above categories, you could be saving your surviving family member hours, weeks and possibly months of agonizing over paperwork upon your loss.
For more information about The Retirement Guys, tune in every Saturday at 1 p.m. on 1370 WSPD or visit www.retirementguysnetwork.com. Securities and Investment Advisory Services are offered through NEXT Financial Group Inc., Member FINRA / SIPC. This checklist is general in nature. NEXT Financial Group, Inc. does not provide tax or legal advice. The Retirement Guys are not an affiliate of NEXT Financial Group. The office is at 1700 Woodlands Drive, Suite 100, Maumee, OH 43537. (419) 842-0550
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