Strategies to Achieve Financial Peace of Mind

I recently attended an estate planning class called “How to Achieve Financial Peace of Mind.” Below are ten key take-aways that stood out to me from this presentation:

Plan For the Future- Prepare legal documents that specify how your estate (i.e., property, savings and investments, and other assets) will be managed when you die and how your health care and financial decisions will be made if you are incapacitated. Documents to prepare with assistance from an attorney include a will, durable power of attorney for finances, and a living will. Be sure to share copies of these documents with the people named as your personal representatives.

Create a “When I Die File”- Assemble in one place documents that someone (e.g., spouse, family, executor, attorney) would need in the event of your death or incapacity. These documents can be in digital and/or paper form. Items to include are a current net worth statement, list of people to contact, list of who gets your untitled property, list of automatic bill payments, and a draft obituary.

Fund Your Trusts- Retitle personal assets held in your name (e.g., bank accounts and securities) into the name of your trust if you decide to create one. It is critical that trusts be funded to be of value and it is a common error when they are not. Expect that doing this will take some time and paperwork. 

Reconsider Trusts- Consider other ways to distribute property to others and avoid probate without using a trust. Interestingly, the program speaker noted that “trusts are oversold” and recommended using payable on death (POD) designations for bank products (e.g., savings accounts and certificates of deposit) and transfer on death (TOD) designations for investment accounts to transfer property.

Lend Money Carefully- Prepare a promissory note if you lend money to others. It should be signed and dated by both you and the borrower with specifics about the loan agreement including the amount borrowed, the loan timeline (e.g., two years), and penalties for late payments.

Leave a Paper Trail- Tell trusted loved ones about your “When I Die File” and where it is located as well as the location of other important papers (e.g., in a desk, dresser drawer, or file cabinet) and the original and copies of the legal documents described above. For added security, consider a waterproof and fireproof safe (be sure to tell trusted loved ones the combination).

Talk With loved Ones- Communicate with loved ones about the content of your advance directive documents. For example, your desire to not have your life prolonged via a feeding tube or other artificial means. By understanding your wishes, they will be able to be better spokespeople for you if and when the time comes that they need to advocate for your wishes.

Prepare a Digital Assets Inventory- Make a list of the username and password for digital accounts including access to your cell phone and laptop and online accounts. Like the “When I Die File,” be sure to share this list with trusted loved ones. 

Make Your Own Final Arrangements- Prepare a letter of last instruction that includes your wishes for burial or cremation, a funeral or memorial service, special prayers and songs, charitable bequests in your name, and other important (to you) details. Place it in your “When I Die File.”

Review and Revise- Review your estate plans annually or when any major life event occurs such as the death of a personal representative or beneficiary. 

This post provides general personal finance or consumer decision-making information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.