While people around the world take the recommended precautions to protect both their loved ones and themselves from the coronavirus pandemic, financial planning is being discussed as another way to provide additional peace of mind to decision makers and their families.
Alan Wolberg, a senior wealth planner at City National Bank, said financial planning is one of the keys to easing the stress of this pandemic.
Preparing necessary paperwork and reviewing financial plans now can help ease the situation later on, if you or your loved ones contract the virus or face any unexpected illness or other setbacks in the near future.
Speaking with a financial advisor is usually a good idea. Wolberg also suggests five steps everyone can take immediately to assure family members that their affairs are in order.
Create a folder for important papers and let your family members know where it is.
In this folder, include printed copies of your financial statements, including insurance statements, bank statements, statements from brokerage firms and portfolio managers.
Include a list of other assets - more on this later.
Wolberg also suggests requesting a copy of a document called, “What My Loved Ones Need to Know" from your private banker. This is a simple online form that can be saved as a virtual record containing all your important information.
Make sure that you take a look at your entire estate plan, ensuring that all components are up-to-date and they support your goals. For instance, do you have the right people listed as beneficiaries on your retirement accounts? Check to make sure those choices are consistent with your wishes.
Also, does your estate plan include a revocable living trust?
If so, remember that the revocable living trust allows for your assets to be distributed after you pass away. It also designates a “successor trustee" to handle your affairs, in case you are disabled and incapable of managing your assets.
If you're unsure whether or not your plan includes a revocable living trust, you should discuss it with your attorney and financial advisor. You can also find more information on trusts and estate planning here.
Wolberg also suggests making a list of all assets that are owned by the trust.
Remember your folder? Add to it a list of assets, such as business interests. Include your ownership percentage, real estate, personal properties - boats, cars, jewelry and art - and any other assets of significant value.
"If significant assets are not owned by your trust, now is the time to contact your attorney or legal advisor for help," said Wolberg. “Revocable living trusts are often not fully funded. A trust has no legal effect unless it owns assets that it can distribute. Without that, it's just a meaningless piece of paper."
Be aware that if your revocable living trust isn't fully funded, it may be challenging to make changes to asset titling at this time of social distancing.
However, there are virtual options that do not involve having to meet attorneys or notaries in person, including:
An important step Wolberg suggests is contacting your successor trustee to make sure that person has a copy of your trust document, understands their role and accepts the responsibilities of the position.
“If your designated trustee can't or isn't willing to serve in that role, it's better to know now rather than to wait," said Wolberg.
If you need help understanding or explaining the role yourself, contact City National Bank and a trust advisor may be able to help.
Whether you have a revocable trust or not, consider empowering someone – or even various people – to manage their financial and medical needs in the case that they become incapacitated.
For example, a healthcare power of attorney empowers someone to make medical decisions for you when you cannot make them yourself. With the coronavirus, the healthcare power of attorney is especially important, as you could be ill for a lengthy period of time.
Just as importantly, there's another document, a financial power of attorney, which allows someone to act as your Agent to:
Each of these legal documents must be drafted and signed following strict protocols.
“If you don't have these documents in place, seek out the help of a legal professional immediately," said Wolberg. “Most of the work can be done over the phone and the documents can be emailed to you for review before signing."
Managing crisis is never easy, but financial planning now could enable you to ameliorate the stress of the unknown for you and your family in the months to come.
Find solace in remembering uncertain times have occurred before, and there are solutions that help move people forward.
“Catalog your assets, make sure you have communicated with your loved ones as to your planning and your wishes and seek the help of a legal advisor to ensure you are up-to-date on your disability planning," said Wolberg. “You and your family will be glad you took these steps should you fall ill."
Lastly, don't hesitate to ask questions during this time. For more information and assistance with your financial planning, please call your wealth planner or reach out to us at City National Bank.
This article is for general information and education only. It is provided as a courtesy to the clients and friends of City National Bank (City National). City National does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors or persons quoted as of the date of the article with no obligation to update or notify of inaccuracy or change. This article may not be reproduced, distributed or further published by any person without the written consent of City National. Please cite source when quoting.
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