Right now, one question is in the back of everyone’s mind:
What happens if something happens to me?
It’s a question we tend to ignore in “normal” times. We think to figure out morbid things like making a living will or power of attorney sometime down the road. But in the wake of a public health crisis and an economic downturn, the question of your future is more important than ever to answer, and answer now.
Think about it this way:
- If you were sick and incapacitated, is someone there to take care of the business?
- If you manage most of the finances of the household, does your partner or friend know how to find and access everything?
- If you pass away, is your family protected?
If you can’t answer questions like these, you’re putting yourself, your livelihood, and your loved ones at risk.
What’s the worst that could happen?
Too often I’ve heard stories where plans were not in place and things were a mess. Stories like:
- An ex is a beneficiary on a retirement account and the current spouse gets nothing.
- A couple is in a partnership (not legally married), but never formalizes anything. The deceased family gets everything, while the partner receives nothing and needs to leave the home they live in.
- Children under 18 receive large amounts of money without proper legal structures, like trust, in place to help handle the money.
These kinds of situations happen more often than we think. In the event of someone passing away or becoming incapacitated, legal and logistical hoops are an unwelcome burden on loved ones. Especially when they’re in the midst of grieving or managing care.
These risks are even more pronounced for LGBTQ+ folks, who may not have the same legal protections in place either. If you’re not married, for example, you won’t have any claim to your partner’s assets or decision-making power for a life-threatening health issue. Or if you’re trans, there can be issues due to discrepancies with birth name versus chosen name or how your assigned gender is registered. Check out this from the Human Rights Campaign Foundation.
So what can you do to ensure that you and your loved ones are well protected?
Review Estate Plans (or Get Them Started!)
Oftentimes I hear how estate planning is something that is just not at the forefront of people’s minds. But getting your legal documents in order will go a long way toward making sure your loved ones are protected and can act if you’re not able to. Even if you’re not ready to go full-on and have a will written, be sure to have a power of attorney and a health care proxy/living will in place. Use a templated document that meets your State’s standards for legal recognition. You can typically visit your State’s public health website for an accepted template.
Read More about Estate Planning
Review Titling on Your Accounts
In the absence of a will or trust, the best thing you can do to protect your accounts and assets is to make sure the titling on your accounts is correct. Check the beneficiaries on your accounts and make sure they reflect who you want to receive the money. If you have Transfer on Death designations, which allow accounts to directly go to a person without there needing to be a will, are your beneficiaries up-to-date? If you can have most of your assets titled to your desired beneficiaries, this will make things easier for anyone needing to deal with your accounts.
Create a Document with Instructions
Lastly, while having these documents and titling correct is a great start, don’t forget to leave a set of instructions to follow. Consider creating a google document or letter with all your important passwords, information, and an inventory of your things. List important people, too: Who’s the attorney? Or do you have a financial planner that may be able to assist? Where’s your life insurance policy? What bank are your accounts at?
I know these aren’t the most pleasant thoughts, but they’re necessary to address for the sake of you and your loved ones. In uncertain times, create some peace of mind knowing your assets are protected and will be distributed as you wish, and that your wishes for your health will be respected. If you need help with planning and having these types of conversations, contact me to learn more about my financial planning services!
Jim is a financial advisor and owner of Thinking Big Financial, Inc. Thinking Big Financial is a fee-only registered investment advisor offering financial planning and investment management services. Specializing in working with the LGBTQ Community.
Please read my legal disclaimer here.