Often, we live life with the attitude that true tragedy cannot strike us. It is an assurance we give ourselves as we hear about the misfortune around us. However, as a life planner, the years and family situations have added up to tell me that the exact opposite is true. At some point in life, each of us will deal with difficulty. Proper planning up front can take a tragedy (financial, mental or physical) and make the handling of it a lot easier on ourselves and our loved ones. Planning for tragedy is difficult and sometimes seems beyond our financial means, but having our affairs in order when tragedy strikes can be a good starting point.
Here are 4 easy questions to ask ourselves in the New Year. If one can answer yes to these questions, he is in a great starting position for preparing for that rainy day.
Do I have an updated Power of Attorney? A Power of Attorney allows someone to handle our financial affairs if we become incapable of handling our affairs ourselves. This form can allow your spouse, children or family member to have access to your accounts to pay your bills if you are suddenly injured or fall ill.
When appointing a person as your agent under a Power of Attorney, please remember these tips:
- Make sure the person you name has good business sense;
- It is best to name a second person, in case the first cannot act for you.
- Make sure the agent has specialized powers to handle issues such as life insurance, safe deposit boxes, brokerage accounts, vehicles, and real estate.
Do I have a Health Care Proxy? A Health Care Proxy is a person designated to make health care decisions, in case you cannot make them on your own. This person is so often necessary when we are unable to make decisions on our own because of a physical or mental illness. Not only do we need to have a health care proxy, but we need to discuss our medical wishes with that person.
Am I properly insured? Often times we fail to review our insurance policies as our life changes. As we have children, we may want to take a fresh look at life insurance. As the value of our personal property increases, we may want to take a look at our homeowners insurance again to make sure our property is adequately covered. Most importantly, health coverage changes at the beginning of the year. Please review your health policy, particularly any Medicare policies and make sure the programs you are on are right for you. A good financial planner will be able to discuss your insurance options with you.
Do I have a Will that carries out my intentions for my estate? This question is obviously less important than the others, as it pertains to your assets after death. However, a well written Will can protect your estate for your children and grandchildren.