In creating financial stability, one of the most neglected objectives is to prepare for the worst case scenario. It’s not pleasant to think about, but it’s important to protect your loved ones should something happen to you. There are a number of necessary tasks that need to be completed to secure an easy transition for those affected. Let’s look into preparing your finances and assets when thinking about the unthinkable.
How to Prepare for the Worst
Some of the steps that you’ll need to take when making these kinds of arrangements are obvious. Others are just not as easy to remember when preparing for something this uncomfortable to plan for. Here are a few ideas to consider as you prepare for the worst:
- Draft a Will – Having a completed will can make things much easier on family members dealing with loss. There are a number of details big and small to arrange. A will can settle certain questions so that family can focus on the immediate necessities.
- Sign a Health Care Proxy – It’s possible that you will become incapable of making medical decisions for yourself. A health care proxy document gives someone the legal authority to allow doctors to take action.
- Assign Power of Attorney – Similar to the health care proxy, whoever has power of attorney can make financial and business decisions in your stead. This means if you’re incapacitated or unavailable, someone can still access your money and accounts. That way bills get paid to keep your assets from being seized. If someone isn’t able to act quickly, you or your family could end up needing help getting out of debt.
- Organize Documents – Everything will be a little chaotic in the event that something happens to you. Important documents can easily get lost. Don’t make your loved ones or legally appointed proxies sift through unorganized stacks of paperwork. Organize documents in advance to protect both your assets and beneficiaries.
- Pass on Passwords – Your online accounts, whether financial or otherwise, need to be dealt with. Having your important passwords together so that your loved ones can access or close accounts simplifies the process. Keep the master list in a safe location, and inform whoever will deal with the accounts.
Losing someone special is stressful and complicated for everyone involved. Completing the above tasks will make the whole process just a little easier. There are still other important actions to take in advance. Work toward getting out of credit card debt now. Create a list of who you believe will want to be notified. Set aside money in a separate account for burial and other services. Finally, communicate your wishes to those who will be responsible for making plans. Even though these are simple ideas, they’re not easy to think about.
If you prepare for the worst, you save your friends and family from needing legal or financial advice. It isn’t pleasant to make these kinds of plans. Still, doing it now adds protection for your assets and reduces the risk of leaving your loved ones with more problems to solve.