How to Manage

In a relationship, generally one of the partners handles the majority of the financial planning and money issues. But what happens when the spouse who actively managed a couple’s assets and financial future is no longer the decision maker? The less experienced spouse has to step up to the plate, usually with little or no warning.

Since this transfer of responsibility is often occasioned by death, disability or even divorce, it can be an emotionally challenging time. Yet critical decisions concerning investments, insurance, financial and estate planning, need to be made to avoid or minimize financial hardships later.

Here are some guidelines to help bring you up to speed.

Getting Started

The goal of financial management (managing on your own or with the assistance of family) including investments, insurance and estate planning, is to provide you with income, security and the passing of your assets in accordance with your wishes. As you take the driver’s seat, your biggest challenge may be educating yourself sufficiently to participate in decisions about your financial future. In short, you must be able to communicate your needs, wishes and desires to your advisors, and know enough to feel confident that the plans put in place, carry out your wishes.

Putting your financial life in order is essentially a five-step process:

  • Determining your financial and estate planning objectives;
  • Evaluating the continued viability of any plans in place;
  • Understanding the options available to achieve your goals;
  • Formulating a plan to achieve your goals; and
  • Implementing the plan.

Determine Your Objectives:

To determine your financial and estate planning objectives, you must evaluate the data which provides this information. These documents fall into two groups:

  • Financial documents including tax returns, bank and brokerage statements, credit card records, mortgages, insurance, retirement and other employee benefits, and other similar statements which have information on your assets and liabilities; and
  • Legal documents such as your Last Will and Testament, durable power of attorney, health care proxy and any trust agreements that name you as a beneficiary or trustee.

It is important to remember that both groups may embody your estate and financial plans.  For example, beneficiaries can be named in Trust Agreements and your Last Will and Testament. But they can also be named in beneficiary designation forms on file with your employer (for retirement plans and other benefits) as well as banks,  brokers and insurance agents. These designations are as binding as your Last Will and Testament.

Once you have sifted through these materials, you will know the nature and extent of your assets, and how these assets will pass at your death.

Don’t Go It Alone

Throughout this process, it is important to look to trusted advisors, including bank trust officers, your accountant, attorney or financial planner to help you gain knowledge and chart your course. These professionals provide expertise and guidance on the impact of taxes, cash flow, preserving liquidity, the use of insurance and the value of different types of investments as they affect your short and long term needs.

Making Your Plan A Reality

Once you have reviewed the plans and documents in place, and considered the issues and options, you can make informed decisions about a new plan tailored for your circumstances. Trusted advisors, including your attorney, trust officer or insurance agent will be needed to insure that you execute the necessary documents and appropriately transfer assets or resources to implement your plan.

As you learn about financial matters and participate in the decisions that affect your financial well being, feelings of fear and uncertainty will diminish. Before long, you’ll see that understanding and knowledge about financial matters has empowered you to confidently participate in decisions that are important for your future – and the future of others in your care. And, here’s some additional information about what to expect when a loved one dies.

It’s important to establish and evaluate your financial management plan. Please call at the law firm of Susan G. Parker, Esq. PC (914) 923-1600 , to get started.