The What, Where and Who of Your Money

One of the most common statements I hear when I speak to the adult children of elderly individuals is, “I don’t even know how much money they have or where it is located.”  My message to seniors is this:  A black box approach to financial information may be fine while you are well, but if you experience physical or cognitive decline as you age, this lack of transparency becomes a liability.   If you are approaching the time when you want your trusted legal agent(s) to help you handle your affairs, you should give them the information they need as soon as possible.  They need to know WHAT you have, WHERE it is located and WHO will inherit it when you are gone. 

If you have read about our Whole Life List, you know that we daily money managers (DMMs) love lists!  One of the most important lists you can make is a list of assets and liabilities.  Yes, we know that all the information is in your file cabinet…somewhere…but gathering the key information and putting it on a list that you update every quarter (or at least annually) is so much more helpful to your family. 

Here are the key items we usually put on a list of assets and liabilities for our clients:

1.      Name of financial institution

2.      Type of asset (e.g., checking, savings, money market, CD, annuity, IRA, 401K, flexible spending account, dependent care savings account, etc.)  OR Type of liability (e.g., mortgage, auto loan, personal loan, credit card balance, etc.)

3.      Account number

4.      Account Title (i.e., the names on the account. This could be individual(s), a trust, an LLC, etc.)

5.      Balance (and the date of that balance)

6.      Beneficiaries

7.      Advisor’s name and contact information

8.      Financial institution website and/or phone number

If you use an Everplan, a retirement planning tool provided by a financial advisor, or software such as Quicken, you may be able to store this information inside the tool, but you must keep your audience in mind.  If your legal agent doesn’t have access to these digital tools, they won’t have easy access to the information.  Call us old-fashioned, but in some cases, a list is the best way to go.

Beneficiary Designations – How to Find Out What They Are

In order to complete your list of assets and liabilities, you will need to find out who is designated as a beneficiary for each account.  Not every account will have a beneficiary designated.  Assets such as life insurance and IRAs pass to heirs by beneficiary designation, while other accounts will not have beneficiaries and will pass to heirs in accordance with the terms of a will. 

If you can’t find documentation of your beneficiaries in your file cabinet  or if you have the paperwork but it is very old and you aren’t sure if it is accurate, simply contact the financial institution and request that they send you a copy of your beneficiary designation.  This may take several days or weeks to arrive, but once you have the documents, you will not need to request them again unless you make changes to these designations. 

When I first started my career as a DMM, my insurance agent told me a cautionary tale about a DMM who was tasked with faxing a beneficiary change form to an insurance company.  The DMM did as he was asked but failed to keep proof of the successful fax transmission.  A month later the client died unexpectedly and the proceeds from the insurance policy went to his ex-wife and not to the intended beneficiaries, his children.   The insurance company maintained that they never received the beneficiary change form and the DMM had no proof that he sent it.  So if you do make changes to your beneficiary designations, keep a record of what you sent in and the confirmation you received back from the financial institution. 

These are small but very important financial management tasks that may avoid confusion, stress and, most of all, the possibility that your assets will not be transferred in accordance with your wishes. 

If you would like assistance with beneficiary designations as well as other aspects of your personal financial management, please contact us at office@everydaymm.com or 301-801-2294.