Many people don't realize the need for financial planning as they get older. Believe it or not, those who are not actively involved in estate planning may be putting their family at risk. One of the problems that financial planners in New Jersey and elsewhere are finding is that only one spouse may be involved in the finances. When something happens to this person, it may be difficult for the other spouse to continue with the finances going forward.
The surviving spouse may not know what bills comprise the monthly household expenses. Additionally, in an era when many accounts are controlled and accessed online, one spouse may not know the proper passwords and user ID's necessary to gain access to the account. This can particularly be a problem if the surviving spouse is not listed as a joint account holder. In addition to these things, there are other steps that need to be considered when creating an effective estate plan.
Some important steps in financial and estate planning may help to keep your finances on track no matter what happens. It is essential to have adequate life insurance. In about 40 percent of cases studied, the family relied only on the insurance provided by their employer. This may not prove to be enough for many families.
When considering estate planning, it is important to keep beneficiaries up to date on all of your insurance policies, annuities, and retirement accounts. Adding beneficiaries to your assets may help to protect them from the costs involved in probate. It is also important to have a will and keep it updated. In some cases, a trust may be the best option for your family.
Another consideration is to involve your spouse or other family members in the important financial decisions. This helps to make sure that should something happen to you they are able to determine how to make decisions moving forward.
Lastly, keep records of all your New Jersey estate planning information in one location where it can be easily located and ensure that the people who need to know where it is located have that information.
Source: Forbes, "Is Lack of Planning Putting Your Family in Danger?," Erik Carter, June 12, 2012