In my first job out of college, I made friends with another co-worker who had just started work a few months before I did. Along with other new hires our age, we formed a tight social group. Imagine my shock when I came into work one Monday and was told, “ ‘Pat’ was in a bad car accident and is in hospital and we’re not sure if she is going to live.”
It turned out that Pat was driving to her parent’s home for the weekend. It was on a Friday night after work and she dozed off at the wheel and slammed into the back of a dump truck. So, the old saying about what would happen if you got hit by a truck was actually true in this case.
Who Keeps Her Household Going?
Obviously, her parents were not thinking about what was going to happen to her finances while she was away from her home. But at some point, someone was going to have to do that. One question was who was going to take this over while she was unable to do it herself? Another question was what needed to be dealt with and where could the information be found?
Do This Right Now
Are you sufficiently rattled by this story? Good. Then what I want you to do is spend the next 5-10 minutes putting together some information for your loved one. The last thing you want them to do is to tear your house or apartment apart trying to figure out where you keep everything.
Get out a sheet of paper right now and on that paper, I want you to write this down:
(If you have them) “My Will, Financial and Medical Powers of Attorney, and my Living Will are located __________________”
My insurance policies are located _____________”
I pay my bills using ______________ (and if online) and this is my username and password: __________________.
To get into my phone, this is what is necessary ______________.
My paycheck is (sent to me/direct deposited to ____________ account).
If something were to happen to me, I want ___________ to handle my finances and household until I can do it again myself.
(If you don’t have a legal document called a Durable Power of Attorney naming that person to do that, then put that on your calendar as a to-do item for next week.)
Then Take the Next Step
The above is really just the tip of an organizational iceberg that you should have, but it is better than nothing. In Diane’s case, her parents didn’t have a lot to look for since she was just out of school and hadn’t established herself completely yet. But if you don’t have authorizing documentation in place, it can require petitioning the courts to authorize someone to keep things going for you.
Let’s turn this around a bit. What if you were in the parent’s position. What information would YOU need to know about your loved one’s affairs in order to help them out? As a daily money manager, it is my job to go through this process with my clients as I start to work with them. We need to know about all their finances so that we can make sure we manage everything completely without anything falling through the cracks.
Here is a more complete list of information you may want to document about yourself for a loved one. If you are going to have to take over for someone (like a parent), consider these as interview questions for them so that you have what you need to help them.
- Describe where your big four estate documents are located (Will, Financial Power of Attorney, Medical Power of Attorney, and Living Will). Make sure the people named in these documents know where they are located as well.
- If you have insurance policies, indicate where those contracts are located.
- List the names and contact information for key people working with you such as your attorney, your investment advisor, your accountant, and your doctors.
- List any loans outstanding or any money that is owed to you.
- Describe all of your sources of income such as work, retirement income, social security, or reverse mortgage.
- Describe all of your regular expenditures such as credit card accounts, monthly utilities, insurance premiums, school loan payment, mortgage payment, or car payment.
- List where you keep your records – investment records, bill statements, income statements, tax records, safety deposit box key, etc.
- List all of your online accounts, with usernames, passwords, two-factor phone number, and security questions and answers.
While there is a lot more you should capture, this is where it can be helpful to hire a daily money manager to help you through this documentation process. We are trained and experienced with creating this type of organization for our clients.
Hopefully you never have to deal with getting the message I did one Monday morning. Whether you go with a family member, friend, or a third-party, putting together this list will make things go a lot smoother if something were to happen.
Oh, and as for Pat, she did recover and was back at work with our group about six months later. So the story had a happy ending.