Advice before you pass awayThe worst part of my job as an advisor is hearing that a client passed away. It’s hard to lose a friend. Then there’s the uncertainty for the family left behind. Most people deal with the death of a loved one infrequently, which means they aren’t familiar with everything that needs to be done. My job is to make the process as easy as possible, but there is a lot that must be done. Having been through the process of retitling accounts after a death many times, let me give you two ideas that can make it easier for your loved ones.
- Simplify everything you can in your financial lives. Keep investment accounts at the fewest number of institutions possible.
- Don’t have stray IRA and 401k accounts all over the place. Each institution requires its own forms and has a separate process for retitling the accounts. That makes for a lot of work if you have an account here, there, and everywhere.
- Don’t open accounts at multiple banks because a new bank offered you a cash incentive to do so (attaching a savings account to your checking account at the same bank is fine). Again, this just creates more forms during an already challenging time for those left behind.
- Review your beneficiaries and estate plans annually. Make sure your accounts are titled properly.
- If you have a trust, are your accounts in that trust? Make sure you don’t miss any accounts.
- If your accounts are titled in your name, should they be joint accounts? Should you designate a beneficiary?
- Do you have primary and contingent beneficiaries listed for all IRA/401k accounts?
That’s it. If you can do those two things, you will make things much easier on your family when you pass away. They will sing your praises. I will sing your praises.