Power Up Wealth podcast – Episode 98 – Navigating Life’s Plot Twists: Financial Prep Essentials
James Derrick 0:00
Today, we wrap up a series of interviews on navigating unexpected life changes with a goal of creating order, meaning, and reassurance. I’m James Derrick, President of Smedley Financial Services. Today, we’ll be talking with expert and guest, Parker Thompson, about concrete steps to prepare for the unexpected.
Shane Thomas 0:22
Welcome to the SFS Power Up Wealth podcast, where we provide impactful insight and expert opinions on timeless financial principles and timely investment topics, preparing you to make smarter decisions with your money.
James Derrick 0:39
Thank you for joining me today, Parker.
Parker Thompson 0:40
Pleasure to be here.
James Derrick 0:42
Parker is a Private Wealth Manager at Smedley Financial Services. He has a Certified Financial Planning designation, the CFP, and he’s become highly proficient on preparing for the unexpected. He’s just wrapping up a five part series that we’ve been talking about in this podcast. Parker, let’s first define again, what kind of unexpected transitions we’re talking about here.
Parker Thompson 1:02
Yeah, the ones that I had in mind when creating this document or these series of articles to lead people into creating a document like this that helps with these transitions are some of the most common ones that really put life on a different track. It’s death, it’s disability, it’s divorce. Anytime someone who previously was over their financial situation that is no longer capable or competent to take care of it, and it all of a sudden transfers to friend, family, children. These are the kind of situations that I’m thinking about.
James Derrick 1:29
They’re very tough situations.
Parker Thompson 1:31
Yeah, they can alter a lot of the direction of the people’s life, one. Two, it can really change where you previously weren’t having to take care of your parents estate now you have to take care of it. It can consume. It can be all consuming. Right when it happens and you can’t really see it coming, and it takes months, if not years, sometimes, to wade through.
James Derrick 1:48
Yeah, now we’ve made some preparations at our house for some of these things, and it’s interesting because I’ve tried to communicate like, Okay, this is where I keep some of these important things. I’m not sure that everybody remembers where I’ve got stuff.
Parker Thompson 2:01
Right? So you may know where things are. Do your loved ones know where they are? Are they able to locate it? Do they know what to do when they get a hold of it, if they find it? Do they know who to talk to? Do they know why you did the way, why you completed it or stored it or wrote it, the way that you did some of these things, the confusion and the stress, the weight of all that, that’s what gets to people, more than more than all the decisions, the 1000s decisions you have to make off of these situations, is really the confusion, knowing the why behind it, and not sure what we should do, right? What are the instructions? Where do we go from here?
James Derrick 2:34
You can see why the why is important as well. Because depending on who is taking over for you, like, you know, if you’re deceased, who’s who is inheriting what you’ve left behind. The why could be really important, because you’re not just handing over what you had, but you’re trying to pass on who you were as well and some of your values.
Parker Thompson 2:54
Yeah, I mean, you worked hard for your money, and you have set things in place and set things in motion that maybe you thought would be for a certain purpose or serve a principle in the family, right? Maybe it follows a tradition, but no one may know that unless you communicate it, right? That could all just be lost in translation.
James Derrick 3:10
When we’ve had Mikal Aune in here, he has talked about telling stories too, to pass on some of those values, and I think that’s a helpful way, because people can actually remember them.
Parker Thompson 3:20
Yeah, this is one thing that I bring up in this article, is that, other than the other state documents that you have to include in all of your estate planning and the various things that we should have set forth in a in a document or some sort of a procedure like this, you want to have kind of a love letter or a letter to the family, because you don’t always get to communicate some of those things through a will or a trust or medical directives, things like that. Having a letter that explains, here’s what I would like to happen with the money. I would wish for this to happen. Here’s why I put the money in this place. Here’s why I did this. It can bring a lot of clarity to people, and it can also help with if you can make some of the decisions for people beforehand of where you intention, some of the money to go, or where you intention some of the property to go. That decision is less of one that your children have to make, or your friends or family, whoever’s taking over.
James Derrick 4:08
Makes perfect sense. Let’s dive into some of these concrete ideas. What kind of documents are we, are we saving?
Parker Thompson 4:16
The ones that are going to be non negotiables, or that are pretty common that we’ve heard of are right, a will, a Last Testament and a will, a trust. If you need specific, special trusts or different types of trusts, you can, you can look into those but, and we can also advise on those. But everyone needs to consider doing a trust if we have assets that are in excess of a certain dollar amount. Medical directives, financial directives, right, power of attorneys, if there are any special situations, if you’ve had a divorce, making sure that your your prenuptials and your post-nuptials and all those documents, make sure those are all in place and that you actually know where they are. Those are kind of the non-negotiables that I would say that everyone should consider having.
James Derrick 4:55
Some of those you would actually want to be able to find in a hurry too. Like, it’s not like, a Medical Directive. It’s not like, oh yeah, I know we’ve got one somewhere. I’ll get back to you in a week. I mean, like, you’ve got to know where that is.
Parker Thompson 5:05
Yeah, if there is a split decision that needs to be made for someone who’s incapacitated, those directives, the power of attorneys, those need to be known and be able to be furnished pretty quickly sometimes.
James Derrick 5:15
Yeah, okay, so outside of the legal documents, what other kinds of things should people have around and have access to?
Parker Thompson 5:23
There’s some that we intuitively just think, you know, we should probably keep a hold of someone’s social security cards, their birth certificates. We should probably hold on to titles, deeds, things that we own, of assets. But we don’t always think, you know, where do we where do we store those? And do they all get stored in the same spot? Some of those documents are some of the ones that are lesser known, that we could even consider, are different certificates. Different certificates, different licenses that may be applicable, marriage licenses. We’ve talked to, we’ve talked to many, many clients that have found out that their parents are holding old stock certificates or old bond certificates that probably need to be given to a financial institution somewhere for safekeeping.
James Derrick 5:58
If you have those in paper form, you actually want to transfer them and get them into electronic form now.
Parker Thompson 6:04
Right? Sometimes they’re, you know, they’re worth, maybe not a lot of they’re more of a sentimental thing, and those ones, you can hold on to. But if you know that, it could be worth a good amount, your value of your stock or your value of your bond is in that piece of paper. And so if you can get that somewhere safe, then you’re less risk to any type of natural disaster or losing it, or getting torn up, or, you know, eaten by the dog as the homework would be.
James Derrick 6:26
What about the online presence that is, it’s so important to people nowadays? How does that come into the equation?
Parker Thompson 6:34
I don’t think a lot of people consider online assets, or some of their digital assets to be assets.
James Derrick 6:40
We’re talking about Facebook, Instagram, these types of social media accounts.
Parker Thompson 6:45
Yeah, we’re talking, I mean, we’re talking about all of your logins to your bank accounts. We’re talking about your credit card miles, your airline miles. We’re talking about not only just your social media, but the you have to consider all these things assets, and they all have a login. They all have a password. So first and foremost is having an area where those things are recorded that someone has access to, a trusted person has access to.
James Derrick 7:06
Are you telling us to write down our passwords?
Parker Thompson 7:08
I am telling you to probably have a more sophisticated way to do that, but at least, at the least, have them written down somewhere until you can find a better way. My recommendation is to have it on a safe, secure drive somewhere, either in a cloud or on a drive device that’s secured.
James Derrick 7:08
There are a lot of companies that actually do this service where you can sign up and they will save your passwords for you, and you just have to know one master, hopefully a very difficult master password.
Parker Thompson 7:34
Yeah there are a lot of companies, and there’s a lot of built in. You know, most of the operating systems on most of your devices have some sort of password manager built in. Using that, at least to get started is a good starting point.
James Derrick 7:45
Now, along with those passwords, I mean, you talked about like insurance and investments and all the logins to access that online. I guess you really need to have a list of that too, like an inventory.
Parker Thompson 7:58
Having a list of each of these accounts and where to contact and who they’re with, and the logins associated with them. Saves a lot of time upfront from someone just searching around to see, well, I know they have this money out here somewhere, or this account or this asset somewhere, I don’t know where to look, but if you have all those details written down, it can direct the person in the right place to go, which saves a lot of time.
James Derrick 8:19
Oh, absolutely. I mean, you there’s no hope if you don’t even know the account exists. We’ve talked about cell phones as well in the past. Let’s just as a reminder. I mean, what’s your recommendation on a cell phone? Like, if something were to happen to me, we can’t turn off my phone immediately.
Parker Thompson 8:34
Right. There’s a lot of things that are connected with people’s phones. You can’t just turn it right off. It is probably best to hold on to it for the better part of a gear and just kind of let obviously you’re gonna have to give someone access to it, or have someone that can gain access to it, a trusted person so they know how to get into it. But whoever is taking over a phone of a loved one may want to hold on to it for a year. Just because all the apps are a lot of those are automatically logged in. Some of the passwords are stored there. The notes are all there. So you want to make sure you get everything off the phone before you completely wipe it, delete it, turn it off. You may, you may also get communication through their phone on some things that you may have forgotten about, bills, certain things, like that.
James Derrick 9:13
I think about like, two factor authentication too, right? You know, when you’re doing a login and they’re like, Hey, we’re gonna send you the code, and you’re like, well, that’s not my phone, huh? Yeah, that’s my, you know, my spouse’s phone.
Parker Thompson 9:20
Right. We’re going to call you and send you a code, or we’re going to send it to your email, and the only way you have access to their email is on their phone somehow, right? Or a text message. That’s all. It’s all relevant.
James Derrick 9:30
Yeah. I mean, all of that is, is really important, and it’s such a hassle. But, I mean, it would be an even bigger hassle when life’s unexpected challenges come around.
Parker Thompson 9:38
Yeah. I mean, it’s annoying to have to set up and redo your own passwords. Imagine having to do it for someone that’s not you, and having to verify your own identity, yeah, be that much tougher.
James Derrick 9:47
That’s a good segue for what you would do Parker as a financial advisor, as a private wealth advisor, what’s your role in helping people with these kinds of unexpected challenges?
Parker Thompson 9:59
We typically point people in the right direction. We can’t always write the documents for them. In fact, we can’t at all. We usually refer to a an attorney or a CPA right or an accountant to do some of this legwork, but we can definitely help advise and point people in the right direction. Based on the assets that they have and based on their plan and what they hope to do with those assets that property or that money, we point them in the right direction as this is probably what you want to consider for taxes, is maybe what you want to consider for giving to the next generation. Here’s how to keep it safe. Here’s how to keep it secure. We’re kind of just the quarterback. We want to make sure we point people in the right direction and lead the play out there.
James Derrick 10:36
And you’ve experienced all of this before. I mean, many times.
Parker Thompson 10:39
I’ve seen the clients that really take hold of this and really plan and communicate early and often with their family, and this is not an issue. Everything transitions privately, discreetly and very quickly efficiently. I’ve also seen the worst side of the coin, where none of this is communicated. We’re not sure how to get things set up. There are spouses and loved ones and children that are left in the blind and left without inheritance and left without privacy, and sometimes there’s backbiting and infighting, and those are situations we want to avoid. This is why we we want to get all the ahead of most of these things.
James Derrick 11:11
Yeah 1,000%. I couldn’t agree more.
Parker Thompson 11:14
I’ll tell you one other experience that I that I’ve seen, is that the families that go into this thinking that they’re going to be fine and that their siblings are not going to fight, and we all we’re all good. We’re all in agreement here. Once money presents itself in the in the situation, once property and sentimental items present them present themselves in the situation, things change. Emotions change. It’s it’s typically a high emotion time when someone passes away or becomes disabled or divorced, not a time where you want to be making decisions. So if, even if you think things are just going to go over smoothly. It’s better to have things in place to ensure it.
James Derrick 11:46
I couldn’t agree more, and I love how you said communicate early and often, because even though that you may think like, well, I’ve prepared for this, I think all of us could prepare better, and all of us need reminders of what we have done, and our loved ones need reminders of what we’ve done as well. Yeah, thank you for coming in Parker.
Parker Thompson 12:07
Thanks so much for having me.
Shane Thomas 12:13
Thank you for joining the Power Up Wealth podcast. Smedley Financial is located at 102 S 200 E Ste 100 in Salt Lake City, UT 84111. Call us today at 800-748-4788. You can also find us on the web at Smedleyfinancial.com, Facebook, Instagram, Twitter, and LinkedIn. The views expressed are Smedley Financials and should not be construed directly or indirectly as an offer to buy or sell any securities or services mentioned herein. Investing is subject to risks, including loss of principal invested. Past performance is not a guarantee of future results. No strategy can assure a profit nor protect against loss. Please note that individual situations can vary. Therefore, the information should only be relied upon when coordinated with individual professional advice. Securities offered through Osaic Wealth, Inc., member FINRA/SIPC. Investment advisory services offered through Smedley Financial Services, Inc.® Osaic Wealth is separately owned, and other entities and/or marketing names, products, or services referenced here are independent of Osaic Wealth.
