1. Last will and testament: If you have any assets whatsoever, then you should have a last will and testament prepared. This will ensure that your possessions are distributed according to your wishes. Otherwise, the courts could decide what happens to them. While some possessions may pass automatically to your spouse, your estate may have to go through the probate process if you don’t have a will, which can be cumbersome and time-consuming for your heirs.
Software programs and websites are available that can help you create a will if your situation is not complicated. Or, you can hire a lawyer to prepare a will for you, often for a relatively small fee.
2. Living will and health care proxy: These are different from the last will and testament. A living will gives you the opportunity to express your desires regarding the implementation or withholding of life-sustaining measures if you are incapacitated. With a health care proxy, you designate someone who can make health care decisions for you if you are unable to communicate them for any reason.
3. Durable power of attorney: This document will name a representative whom you designate to make financial and legal decisions if you can’t make them for any reason, whether physical or mental. This person will also have access to your financial accounts and may even provide guardianship for your children under conditions that you specify.
4. Estate plan: Many people think that just the rich need an estate plan, but this isn’t necessarily the case. If you have assets that you want to pass on to your heirs, consider creating an estate plan to structure and arrange how they are passed on with minimal tax consequences for your heirs. An attorney who specializes in estate planning can help you.
5. Credit reports: In today’s world, your credit report can make or break you financially. Your credit score may dictate the interest rate you pay on loans and credit cards, whether you are approved for a mortgage or car loan, and even whether or not you receive a job.
Unfortunately, credit reports aren’t foolproof. They may contain errors, so it’s your responsibility to monitor your credit reports and get errors fixed if you find them. You can obtain one free credit report each year from each of the three major credit reporting bureaus - Equifax, Experian and TransUnion - by visiting www.annualcreditreport.com. If you keep this with the other important documents outlined above, your representative or heirs will have a much better understanding of your assets and debts.
6. Financial manifesto: Some experts say that spouses should create “financial manifestos” that lay out their financial dreams, goals and strategies they will pursue to achieve them. There is no set process or template for such a document - every couple should follow a process that works best for them.
Plan on setting aside a block of time to have a financial heart-to-heart with your spouse. Write everything down on paper or put it into a document or spreadsheet. This way, when you have financial disagreements or need to make important financial decisions, you’ll have a master plan that you can refer back to.
Material contained in this article is provided by David Lerner Associates, Inc. for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.
David Lerner Associates is a privately-held broker/dealer with headquarters in Syosset, New York and branch offices in Westport, CT; Boca Raton, FL; Teaneck and Princeton, NJ; and White Plains, NY. 877-367-5960; http://www.davidlerner.com.