just in case estate planning San Antonio PAX Financial

‘Just in Case’ Preparation – Estate Planning for You and Your Family Members

Financial Planning, holistic financial planning Jul 3rd, 2018 by: Darryl Lyons

Death is not a fun topic to discuss, especially with loved ones who “don’t want to think about that right now.” But it’s a conversation that must be had. Death is an inevitable part of life. And I can assure you that having the uncomfortable conversation and putting proper estate planning into place will make that time easier for those you leave behind.

When people “don’t want to think about that right now,” and then don’t, your family is left with lots of unanswered questions, making the grieving process stressful and frustrating. They may struggle with questions like, who should take the children? How do we pay for a funeral and how would they have wanted it? Do they have savings? Inheritance? A charity they want to donate to? How do they pay existing debt?

When people plan ahead, they make the above action items much smoother, especially if they provide, in advance:

  • A will
  • A list of assets and liabilities
  • Contacts of key professional relationships

You should also have conversations with your beneficiaries. Clearly articulate why you are leaving the estate the way you decided and how it will be facilitated. You want your family to love each other after your death; not be bitter.

Take the time and plan your will with preparation and thought.

Regardless of how it’s postured, people need to talk about life and death.

One of the most important proclamations that must be written down by parents is who becomes guardian if the parents pass away. The last thing you want is for the courts to hand your kids over to someone you don’t approve of. Don’t depend on strangers to decide who takes care of your children if you pass away. Identify the guardian early.

 

4 Key Steps to Establishing a Guardian

1. Establish your will.

Set the roadblocks aside and complete a will for the purpose of writing down exactly who you want to take care of the kids. The establishment of a guardian is processed in conjunction with a will.

 

2. Name someone who shares the same values.

Do you want your child to attend church? Is it your desire to have your child carry the same passion for humanity that you have? If so, make sure your guardian will honor your heart and continue to instill those same values after you pass away.

 

3. Separate the money from the kids.

You should assign someone to take care of the money and someone else to raise the kids. In fact, the best family to take care of the kids may not be the best financial people. You can pick a trustee at a financial institution or a friend who can help pay bills for your children; it doesn’t have to be the guardian.

 

4. Get life insurance.

Make sure your guardian knows they are responsible for feeding new mouths and that you have acquired enough life insurance to provide for this.

 

Typically, the only time someone brings up the topic of life and death before I do is if a tragic event made national news. This decision-making is not rooted in logic and is called “recency bias” by behavioral finance experts. This means that generally, we aren’t willing to plan for our family until death disturbs us.

 

Have questions about estate planning? Register for our upcoming Essentials of Estate Planning workshop. Seating is limited.

 

Your family should also be prepared. There are 10 critical rules your family must follow in the event of your death to ensure it’s a time of celebration and not financial worry.

 

10 Things Your Family Members Will Have to Do

 

1. Get certificates.

Your family members will need to gather about 15 copies of your death certificate. Don’t rely on photocopies. Many institutions will not accept them. Also, it would be helpful to call the county clerk’s office for copies of marriage certificates and birth certificates.

 

2. Contact the county.

The county is responsible for probating the will. Courts are established to help make sure the money goes to the right place. However, if you have wisely hired an attorney to set up your will, then go through him or her first rather than navigating uncharted waters.

 

3. Contact all the financial companies.

Whoever is authorized to settle the estate (also called an executor) should immediately notify the health insurance companies, life insurance companies, property and casualty companies, banks and investment companies.

 

4. Stop all auto drafts.

Your beneficiaries will need to watch your bank accounts and make sure that all auto drafts are discontinued.

 

5. Check past tax returns.

Tax returns tell stories about income sources. They may identify items that might not have surfaced when looking in the files. Your beneficiaries should look at the last two years of tax returns. Keep in mind, they will have to file a final return as well.

 

6. Call Social Security.

Usually Social Security knows about the death before you do. Be sure to contact them anyway. Also, if there are other pensions coming in from federal (veteran associations) or state departments or a private company, notify them quickly as well.

 

7. Confirm any debts.

Your beneficiaries will need to contact credit card, auto loan, mortgage companies or any other lenders. Debts will need to be paid off by the estate.

 

8. Check the mail.

In the mail, your beneficiaries may find other financial relationships. They’ll need to let the utility companies know of your death. Eventually, all mail will need to be forwarded to another address.

 

9. Don’t “do.”

Anyone who inherits your money or assets should not do anything with the money for a year. They will need to retitle things in their names, but the idea of spending or investing immediately could be harmful. Emotions and money don’t mix. That’s why lottery winners are often broke.

 

10. Budget.

It is important that anyone depending on your income revises their expenses and income sources and create an updated budget. It is helpful to be transparent in family meetings about the new cash-flow plan. Here’s a great budgeting resource for younger people.

 

As you can tell, there will be a lot of effort by your family and specifically your executor after you are gone. Asking them to do this significant job with confusion and a heavy heart is a difficult task.

Have the difficult conversation about death early and plan ahead – for them!

 

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This material is provided by PAX Financial Group, LLC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The information herein has been derived from sources believed to be accurate. Please note: Investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results.

Darryl Lyons

Darryl Lyons

CEO and co-founder of the PAX Financial Group, Darryl Lyons has been a licensed professional in the financial services industry since 1999. A lifelong Texan, Darryl began his career in the financial sector just one day removed from earning his bachelor’s degree in corporate financial management and accounting at St. Mary’s University. Throughout his career, he has won awards for recruiting and development from Fortune 100 companies. In January 2007, he chose to begin and develop his independent practice. He joined Andres Gutierrez and Joseph Schuetze to form the PAX Financial Group. Darryl also served as the Chairman for Brooks Development Authority. Shortly after his service, Mayor Julian Castro, named a park “The Darryl W Lyons Park” in honor of his service. He was named to the 2010 San Antonio Business Journal’s “40 Under 40 Rising Stars,” which honors people making a difference in business and in the community.

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