Question submitted via Open Source:
I would love a checklist of some sort that I could use to gather my information and share with family; so, not only would I get everything done correctly, but my family would have what they need. ...I don't have a lot of money to hire an attorney or that kind of thing, but I still need to take care of my finances. What sort of resources are available that make planning affordable?
"Our goals can only be reached through a vehicle of a plan in which we must fervently believe, and upon which we must vigorously act. There is no other route to success." -- Pablo Picasso
MANSFIELD - Nearing or at the end of a lifetime of work is no time to ease up on financial planning. In fact, experts will tell you it's perhaps the most crucial period when it comes to ensuring your future is secured, the time to make sure all of that hard work doesn't go to waste.
A crucial first step for late financial planning, according to Eric Parr of the Parr Insurance Agency in Crestline, is knowing what you want to accomplish.
"We want to make sure they understand they are in charge," Parr said. "We are here to help them make good decisions for their desires. We want to help them understand what is possible and to help them determine what actions are best to take to get a desired result."
After making those decisions and implementing them, Parr said another key is monitoring the results and making changes as needed.
"As you can imagine, we get lots of different answers (from clients)," Parr said. "We have lots of different raw materials (physical assets and time divided by health) with which to work. Every case is different because we work with individuals," Parr said.
And regardless of a lack of past planning, and even with modest resources, Parr said anyone can benefit by sitting down with a financial planner or risk expert. He said national averages show only about 5 percent of people actually engage in financial planning with a professional.
"Absolutely, it can always be improved with some understanding of where you are," Parr said. "We live in a blessed time where people are living longer. (In some instances) we're outliving our money. It's a whole different world. People have lots of resources that they don't take into consideration like they should."
Parr said no one should hesitate to consult an expert, regardless of their own inexpertise or lack of prior planning.
"That's kind of where we have filled a niche. If the (expert) makes them feel self-conscious, (clients) should pick up their stuff and go someplace else," Parr said. "At the same time, the (client) is going to have to understand, the person they are asking for help may only have so much to work with."
Each individual client has factors that must be considered, according to Parr.
1. Market risk (risk of losing principal).
2. Inflation risk (risk of investments that don't keep up).
3. Uncle Sam risk (such as changing tax laws).
4. Time risk (most people don't value it correctly).
5. Indecision risk (nothing stays as it is).
There are also financial planning variables which Parr said must be considered. Unfortunately, he said, about half of the people he meets choose to ignore the need for financial planning. Another 25 percent believe it's too complicated to learn. Another 15 percent don't put priorities in the right order for their individual reality.
Parr specializes in a myriad of services geared toward this specific age group. He can be reached at email@example.com or (419) 683-3904.
Longtime Mansfield attorney Don Hoover of Weldon, Huston & Keyser said many people misunderstand the role of estate planning as part of an overall financial strategy.
"Young people and even older people do not think about dying," the 31-year attorney said. "It's a topic most people do not like to talk about. That is what most people think estate planning is ... what happens to your stuff when you die.
"However, there is more to it. What happens if you get sick and you cannot make medical decisions? Who do you want to make medical decisions for you? How will your bills get paid if you are not able to do it? Do you have a medical power of attorney, financial power of attorney and a will? If not, ask yourself why," Hoover said.
It's not a daunting financial challenge, according to Hoover.
"The cost of basic estate planning, a will, medical power of attorney is generally around a couple of hundred dollars. So it isn't that expensive. Also, you can do it in stages -- do the medical power of attorney, do the will a couple of months later and the financial power of attorney. Most law firms will accept payments," Hoover said.
"To me, the most important is the medical power of attorney. If you are not able to make medical decisions, time is of the essence. If you have bills to be paid, they usually have a grace period and you have some time to try to figure out how to pay them. If you are not completely incapacitated or legally incompetent, you can sign a power of attorney at any time.
"As for the will, if you do nothing, Ohio law basically says your stuff goes to your closest living relative, which is where most people want their stuff to go. Yes, it goes through Probate Court and everyone thinks Probate is a terrible thing. But it's not as terrible as needing a medical decision made and for whatever reason you are unable to make it and you do not have a medical power of attorney.
"What happens is you need to wait until the Probate Court opens and someone has to file to be appointed your guardian to be able to make that medical decision. That is much more expensive than the cost of a medical power of attorney. If it's over a weekend, you wait until Monday," Hoover said.
For those seeking more information, contact Hoover at Weldon, Huston & Keyser at 419-524-9811.
When finalizing plans for your financial future, it's also crucial to make sure your important documents and records are assembled in manner and location that other family members can access in times of emergency or other need. These can be gathered for placement in a fire-proof safe, bank safety deposit box or kept on a computer with appropriate safeguards.
Here are a list of basic documents and records that could be assembled:
1. Social Security card.
2. Birth certificate.
4. Any other official, hard-to-replace documents.
5. Contact information for yourself and your own emergency contacts, including nearest relatives, will executors and employers.
6. Copies of your Will and medical directives (keep originals with your legal representatives).
7. Insurance information, including home, auto, medical, life, disability, etc., including agents/brokers contact information.
8. Health records, including immunization records, allergies, medications, dietary restrictions and medical/surgery treatments.
9. Property records, including vehicle information, home deeds and a home inventory list.
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