When the unexpected happens, like death, divorce, or incapacity, having things in order is a great benefit. The idea of leaving a spouse or caretaker responsible for your affairs can be overwhelming. I hope to help you overcome any anxiety you may feel and better prepare for the unexpected.
In this article, we will explore identifying liabilities and other responsibilities. Some precursors to setting the foundation are communication with your would-be caretaker and involving them in the planning process. Communication with this person early and often is key. You do not want them to feel blindsided by the responsibility you wish to give them. Setting up ways for them to access documents, logins, and key knowledge will aid with the estate planning documents you should have in place.
Liabilities: You’ll want to list them with all pertinent information. The most obvious and largest liabilities will be mortgages, home equity loans, lines of credit, and auto loans. You’ll also want to list smaller ones like personal loans, IOUs, personal guaranties, and financial obligations to others. Make sure to include the amount, terms, payment information, contact information, phone number, and where you have stored any documents related to the debt.
Additional information to add would be credit card details, leases, subscriptions, and even a monthly budget for reference. If you hold a balance on credit cards regularly, this would be crucial to know. Information on how balances, leases, subscriptions, and bills are paid helps immensely. Subscriptions to streaming services, TV, internet, cell phones, software, etc. are increasingly stacking up. Knowing what goes out and needs to be paid, either manually or automatically, can clear up a lot of confusion.
What might be more critical is the login needed to get into each company from which these loans or subscriptions come. From there, you can decide to continue, stop, or change payment settings should you need to.
As you continue to go through this process of creating your reference document with all the necessary information, tackle it in small steps. Bring your trusted professionals in to help ensure everyone is on the same page. In the next installment, we will dive into insurance and benefits. Our team at Smedley Financial is here to help and guide you throughout the process.
Click here for part 1 and click here for part 2.
