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Getting Your Affairs In Order - Beyond Living Wills

By Gary D. Halbert
March 29, 2005


1.  Most Survivors Are Unprepared

2.  Getting Your Affairs In Order

3.  Leaving a Written Record

4.  Resources


The Terri Schiavo case has focused America’s attention on the need for living wills.  It has been reported that because of the publicity, literally millions of Americans are seeking advice on how to prepare a living will so that their loved ones will not be put in a position of making a life or death decision should they become incapacitated.

It is unfortunate that it takes a tragic case like this to focus our attention upon putting a written plan in place that would help our loved ones should we die suddenly or become incapacitated.  However, living wills are only the tip of the iceberg when it comes to planning for survivors.  There are many financial, legal and family issues that should be addressed prior to death in order to take some of the pressure off of a surviving spouse or other loved ones.

No one likes to talk about death, and many people put off planning for this contingency for that reason.  Some young people think that death is a long way away, so they do nothing in the way of planning.  Yet people of all ages are killed every day in car crashes and other accidents.  The survivors of premature deaths are usually the hardest hit, because the death comes as much more of a surprise.  That’s why it’s very important to plan for the possibility of an untimely death, even if you are young and healthy. 

Since the Schiavo case has brought death to the forefront, this week I am going to address several important financial planning issues everyone should consider, just in case an untimely death should occur.  I will also point you to valuable resources and checklists that can help you prepare for an untimely death. 

In this E-Letter, I will refer to the “financial partner” as the person who primarily handles the family finances, and the “non-financial partner” as the one who is usually not aware of all of the financial details.  I do not use the term “spouse” because there are many single readers who may read “spouse” and think that this advice only applies to married couples.  It applies to all of us.  I also fully realize that in many families both spouses equally share financial duties.

Unprepared Survivors

In the financial services business, we have more than our fair share of widows and widowers who come to us without a clue as to what kinds of investments their late spouse owned, how much was invested, or how and where the assets are held.  They are not alone.  A recent article I read stated that studies have shown over 90% of survivors are not fully prepared for an untimely death.

This isn’t surprising given how many families handle their financial affairs.  In lots of  cases, one spouse is in charge of the checkbook, investments and most importantly, filing of important papers.  The other spouse is often minimally involved, signing on the dotted line when necessary and generally knowing where important records are, but not familiar with the details.

Unfortunately, the non-financial partner is sometimes that way by choice.  I have talked to many couples where the husband or wife will say that the finances are the other partner’s responsibility, and they don’t care to know anything about them.  In other cases, the financial partner intentionally keeps the other partner in the dark.  This is especially prevalent in single individuals, who are often reluctant to share their financial information with someone else, even a family member.

Add to this lack of knowledge the shock and grief that accompanies an untimely death, and you have a recipe for a financial disaster.  Widows and widowers are often preyed upon by unscrupulous scam artists who offer help in time of need, but end up taking advantage of bereaved survivors whose judgment may be clouded by sorrow.

Yet, this is a disaster that is almost totally preventable.  Just by taking a little time to document the financial details that pertain to your family can save hours of searching, not to mention the emotional strain coming from being thrust into the financial role without any preparation.

Gather And Organize Your Information

My first bit of advice may sound too simplistic, but it is to gather your financial information into a file cabinet, bank safety deposit box or other suitable storage medium.  It is amazing to me how many different places financial information is kept in many families.  Some have part of their information at their office, other parts at home, some in a file cabinet, some in a dresser drawer, etc., etc.  There are times when survivors find important documents only by accident, and sometimes many years after death.

There’s no wonder why many survivors have a hard time figuring out what their financial situation is, because they are having a hard time finding all of it, much less sorting it out.  One article I recently reviewed estimated that as much as 25% of life insurance benefits are not paid to beneficiaries (, and I’d be willing to bet that in many of these cases the benefits are not claimed because the beneficiary doesn’t even know about the policy.

When deciding where to store your important financial information, be careful of bank safe deposit boxes.  In some cases, banks will freeze access to safe deposit boxes upon notification of the death of the holder.  This can be true even if the box is jointly owned with right of survivorship.  Therefore, access to any important paperwork kept in the safe deposit box could be significantly delayed.  If it is necessary to keep original documents in a safe deposit box, you should make copies of them to access if death occurs when banks or closed or access to the box is restricted.

Getting Your Affairs In Order

Once you have gathered all of your financial materials together in one place, it’s time to review them and get them in order.  By getting them in order, I don’t mean alphabetizing them or putting them in nice neat file folders.  What I mean is that you should review your financial situation and make sure that it reflects your current situation.  Specifically, I would recommend that you do the following:

1.   Update your will.  If you don’t have a will, get one.  It is also very important to update your will periodically.  Estate laws change periodically and differ from state to state.  I recommend that you consult a competent attorney who specializes in estate planning for this, even if your estate is not expected to be large enough to trigger an estate tax. 

I do not recommend using do-it-yourself resources to do your will because they can never tailor a document to fit all of the intricacies of most families, and this is especially true when it comes to blended families.  Plus, since estate planning law changes frequently, websites and books will not notify you when your document needs to be revised, but a good attorney will.

2.   Make sure all of your assets are titled correctly.  The way assets are titled has an effect on how they transfer upon your death.  For example, a bank account held by two people as “joint tenants” transfers differently than if it were jointly owned with “right of survivorship.”  However, consult with your attorney regarding titling issues as there can be risks involved when naming other owners to your accounts.

In addition, it is important to update any information that may no longer be current.  If you have recently married, you may want to add your spouse to the account, unless it is intended for it to be separate property in community property states.  Or, you may have remarried and want to remove an ex-spouse from the title of an asset.

If you have established trusts as part of an estate plan, it will be important to make sure that any assets that are part of these trusts are also titled correctly.

3.   Make sure contractual beneficiary designations are current.  This is along the same lines as #1 above.  Life insurance, annuities, retirement plans and IRAs can all be transferred contractually by naming a beneficiary.  This means that the proceeds are transferred outside of the will and need not go through probate.  However, this makes it even more important to keep these beneficiary designations updated.

If you have recently married, you may want to replace parents or other family members as beneficiaries of your insurance policies.  Just as important, if you have divorced, you may want to remove your ex-spouse as beneficiary, unless your divorce decree requires otherwise.  It is not uncommon for insurance proceeds to be paid to an ex-spouse just because a person never got around to changing the policy beneficiary.

Under most retirement plans, the current spouse is required to be the beneficiary of death benefits, but this is not the case for IRAs.  Therefore, you will also want to make sure your IRA beneficiary is current.  It is also important to name contingent beneficiaries should the primary beneficiary predecease you. 

4.   Make sure you have a financial power of attorney.  A financial power of attorney simply empowers a trusted individual to manage your financial affairs should you become incapacitated.  It takes effect at such time that you can no longer handle your own business affairs, and ceases upon your recovery or death.

In addition to the financial power of attorney, it is important to note any automatic payments you may have set up to be withdrawn from your checking account.  If deposits are no longer made into the account, these automatic withdrawals could bounce, possibly affecting utilities, insurance coverage, debt payments, etc.

If you pay your bills via the Internet, then it is also important to make that known, as well as the user ID and password for your financial power of attorney designee or survivor to use to access your banking information and pay bills as they become due.

5.   Evaluate your life insurance needs and purchase additional coverage, if necessary.  As you review your beneficiary designations, it is also important for you to review your insurance needs.  If you have married, taken on a mortgage or had additional children, it may be necessary for you to increase your insurance coverage.  Also remember that life insurance is cheaper while you’re young, so it makes sense to buy coverage now for where you plan to be financially in the future.

As a general rule, life insurance coverage should be sufficient to take care of final medical and funeral expenses, and also provide for income to the surviving spouse.  The amount of income necessary will vary according to your personal situation, with more coverage usually necessary where the surviving spouse was not employed prior to death.

A general rule of thumb is that insurance coverage should equal seven to ten times your annual salary.  However, in some situations this amount could be more or less because of debt and/or estate planning issues, or other liquid assets.  Life insurance can be a very efficient way to handle any estate tax liability, but with estate tax laws in a state of flux, it is best to consult with a competent estate-planning attorney in your local area before purchasing coverage.

6.   Make your wishes known.  This piece of advice is obviously not limited to financial issues, but it is vitally important to make your wishes known when transferring financial holdings or any other asset with significant value upon death.  While I have noted above how many financial instruments can have joint ownership with right of survivorship, or carry the ability to name a beneficiary, there are other items of value that may not be able to be transferred as easily, such as family heirlooms, antiques, valuable collections, etc.

In those cases, it is imperative that you state your wishes clearly in either a will or living trust.  I think this is especially true today when there are so many “blended families” made up of children united by remarriage of the parents.  What may be a family heirloom to one child could be a valuable commodity at the local pawn shop to another.

Another very important item to consider in this process is the disposition of financial assets.  Whether they are stocks, bonds, managed accounts, real estate or any other type of security, it is important for the financial partner to leave instructions as to how they should be handled upon death.

We often get calls from widows who are now trying to sort through the family investments and determine what they should do with them.  Sometimes these callers are in a near-panic trying to make decisions about assets they know little or nothing about.  Had the financial partner left clear written instructions, this confusion could be avoided.  Thus, it is important for financial partners to consider the needs and level of sophistication of the non-financial partner, and leave written instructions for the disposition of assets accordingly.

It is also unfortunate that sometimes survivors are targeted by brokers and insurance salesmen and even bankers who offer financial help, but are really out to liquidate all assets and put them into products that will generate commissions or fees for them.  From my experience, it is rare that every single investment should be liquidated upon the death of one partner, yet we often hear from survivors who have been given this advice.

Therefore, an important part of getting your affairs in order should include the knowledge that your survivors will likely be targeted by the financial services industry, and leave instructions as to how each asset should be handled.  For example, if you have stocks you have held for a long time that have a low basis and lots of accumulated capital gains, it may be a bad decision to liquidate those and trigger a taxable event.

7.   Note all important contacts.  There are some who successfully go through all of the prior steps in getting their affairs in order, only to fail to do a list of important contacts for their surviving partner.  This list should contain the names, addresses and phone numbers of all important contacts.  From a financial perspective, these should include your banker, broker, insurance agent, attorney, accountant, and financial advisor.

This list is important because the surviving spouse may be able to find all of the insurance policies and account statements, but be totally lost as to how to proceed from there.  The ability to contact a trusted advisor is very comforting during this time of great emotional stress for the survivors.

Write It All Down

Once you have all of your affairs in order and organized where they can be found, it is important that you document all of this in a concise manner.  This documentation will serve as a guidepost for your survivors to let them know what assets you have, where they are located and how they should be treated.  It is not enough to just tell the other partner about these issues and hope they remember.  As the old saying goes, “a short pencil is better than a long memory.”

There are various methods of documenting everything your survivors will need to know.  Perhaps the simplest is a letter to the surviving partner detailing where all of the important papers are and how they should be handled.  I have one friend who has written a detailed letter of instructions to his wife and children that contains all of his financial information and last wishes.  He updates the letter each time his situation or assets change, and keeps it in a place where his wife knows where to find it should he die unexpectedly.

Others keep a summary file folder along with their other important papers that contains copies of statements for assets, special instructions, important contacts, etc.  The summary file approach is usually easier to update than rewriting an entire letter to address changes.

Another option is to obtain a checklist from a publisher, such as All They’ll Need To Know from Emerson Publications (  These booklets help by providing checklists of information that you need to document.  Some people like these better because they jog your memory to include items that you may not think of when doing a letter or summary file.

There are also books that contain information about the best way to get your affairs in order rather than just providing a checklist.  One such book is Getting Your Affairs In Order by Elmo A. Petterle, available on the website.

There is no one best way to document your financial affairs; the important thing is to do what works best for you and your survivors.  I would suggest that you go with the option that you find easiest to keep current, since outdated records can be just as confusing as no records at all.


As I stated at the beginning of this article, I wanted to keep my comments very general and focused mostly on basic financial matters.  There are many other estate planning and family considerations to be made in addition to the above items, including deciding guardianship of minor children, setting up and maintaining trusts, establishing a succession plan for sole proprietors, funeral expenses, etc.  However, all of these are far beyond the scope of this short E-Letter.

Suffice it to say that there are many financial, legal, and family issues to be considered upon a person’s death.  These issues can either be dealt with prior to death through careful planning with qualified professionals, or left to bereaved survivors who will have to face these issues during a period of great stress and turmoil.

If you are reading this E-Letter, it is likely that you are the financial partner in your family.  If so, you need to carefully consider the suggestions I have given and take steps to inform and protect your loved ones should you die prematurely.  However, I also encourage you to give this E-Letter to the non-financial partner to read so he or she will see the importance of becoming involved in the family finances.

I know that the subject matter of this week’s E-Letter has been less than cheerful.  However, since none of us are guaranteed to see tomorrow, pre-death planning is an important consideration for anyone who wants to make it easier for their survivors should they die prematurely.

Very best regards,

Gary D. Halbert



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Forecasts & Trends E-Letter is published by Halbert Wealth Management, Inc. Gary D. Halbert is the president and CEO of Halbert Wealth Management, Inc. and is the editor of this publication. Information contained herein is taken from sources believed to be reliable but cannot be guaranteed as to its accuracy. Opinions and recommendations herein generally reflect the judgement of Gary D. Halbert (or another named author) and may change at any time without written notice. Market opinions contained herein are intended as general observations and are not intended as specific investment advice. Readers are urged to check with their investment counselors before making any investment decisions. This electronic newsletter does not constitute an offer of sale of any securities. Gary D. Halbert, Halbert Wealth Management, Inc., and its affiliated companies, its officers, directors and/or employees may or may not have investments in markets or programs mentioned herein. Past results are not necessarily indicative of future results. Reprinting for family or friends is allowed with proper credit. However, republishing (written or electronically) in its entirety or through the use of extensive quotes is prohibited without prior written consent.

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