Are you prepared for unexpected incapacity? Physical or mental incapacity will prevent you from managing your family’s financial affairs. If you are responsible for your family’s finances, it is always best to plan ahead. There are several ways you can prepare.
Consider consolidating your assets
One option is to consolidate your assets. When you have assets dispersed among several different financial institutes or accounts, it is more difficult for the person stepping into your shoes to locate and manage. The result will be more work and stress for those responsible for taking control of your financial affairs. Consolidate your assets as much as possible.
Keep financial and legal documents organized
The best way to prepare for unexpected incapacity is to organize your legal and financial documents. This will give your financial power of attorney a road map to use when taking over your responsibilities. First, prepare a binder or notebook containing all of the financial institution names, account numbers and passwords. Second, store this binder or notebook in a safe place. Third, and most important, you must inform someone you trust where the documents are being kept, and how they can be accessed. Here are examples of documents that should be gathered:
- Copies of your will, trust, and powers of attorney
- Financial plans
- Insurance policies
- Deeds, mortgage papers, automobile titles
- Stock and bond certificates
- Social Security payment information
- Prior years’ tax returns (at least three years)
- Marriage license
- Birth certificates
- DD214 (Certificate of Release or Discharge from the military)
- Copies of your drivers license and insurance cards
Obtain long-term care insurance
Thanks to advances in medical care life expectancy is on the rise. The downside is the increased need for long term care. The goal of long term care is to help a person carry out essential, daily activities such as eating, bathing and dressing. Due to the high cost of long-term care, your financial security and quality of life may be in jeopardy if you become incapacitated. Long-term Care Insurance specifically covers the costs of long term care since employee health insurance and Medicare do not cover those costs. While Medicaid provides coverage, there are asset and income limitations that may be prohibitive.
The time to prepare is now
Most people do not want to think about becoming incapacitated, However, for the sake of your loved ones, it is a crucial responsibility. Having a plan in place will provide you and your family peace of mind.
If you have questions regarding preparing for incapacity, or any other incapacity planning needs, please contact Wilcox Attorneys, PA online or by calling us at (479) 443-0062.