Starting Your Estate Plan

A couple weeks ago my wife got the call that her father had died unexpectedly. Within 24 hours she arrived in Spain for the cremation. After arranging for someone to watch the kids and taking care of some other things, I caught the next flight to Spain as well. One thing is certain with estate planning: we MUST talk about it.

I was fortunate enough to enjoy this Roman aqueduct (pictured left) in Segovia, Spain over a nice conversation with family at lunch. Like this monument that bridges the past and present, a good conversation about your estate wishes could help bridge the present and future.

On my flight over I serendipitously came across an article in the Journal for Financial Planning that could help you start the estate planning process. The article was about a financial advisor that asked the question: If I die, what happens to the business? This question spawned several scenarios which exposed flaws in their business transition plan. The same idea can be applied to your personal estate plan.

Ask the question, if I die, what will happen? If your spouse is anything like mine, you’ll have a hard time dealing with this question because it forces you to think about the inevitable. Nobody wants to contemplate their mortality. But it is crucial because it can expose problems with your estate plan.

Sit down with your spouse and walk through the process of what will happen if one, or both of you dies. Ask questions like:

• Do you each know where ALL  your accounts are located?
• Are they titled so that either of you could go to the bank and get information while you are waiting for death certificates to be issued?
• What are the phone numbers of your advisors?
• Do you have enough in liquid savings to pay the bills for a couple months?

These are especially good questions to ask if you have one spouse that handles all the money. If this is the case, you might even ask the non-financial spouse questions like- how many bank accounts do we have? Where are they? Who owns them? How would you contact them?

These questions tell you how knowledgeable you each are of your finances. More importantly, they may prevent some financial surprises.

FYI – The best place to gather this information is your tax return. A tax return will show you where you are receiving interest and dividends which tells you where you are banking and investing.

Talking about death is hard enough. Dealing with death and not being prepared for it is an entirely different thing. I’ve sat across the table from clients that said that their parents’ estate plan went smoothly, and I’ve also sat with clients that didn’t have such a good experience. By asking the tough questions you give your spouse something invaluable after you’ve passed: time to mourn.