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Can you simplify finances to make things easier for relatives?

On Behalf of | Jan 4, 2018 | wills

As we begin to get older, particularly as we enter our 50s, it becomes even more important to organize our finances and prepare for the future. Drafting a will, creating a trust and drafting other parts of an estate plan require us to make sure our finances are in order. By becoming more organized we can save ourselves and our beneficiaries from a stressful situation.

The fewer financial accounts we have, the easier it is to monitor and manage our transactions and investments. You may consider combining bank accounts, transferring your previous 401ks and IRA accounts into your current employer’s plan or consolidating them into one IRA. Choosing someone to professionally manage your mutual funds or exchange-traded funds may be much easier than having individual stocks and bonds. Another way to simplify your finances would be to set up automatic payments. Having your bills charged to a credit card, and auto-paying the bill each month, may help you avoid late fees and damage to your credit score. However, you never want to have too many credit cards. Experts suggest you have one for daily purchases and one for your automatic bill payments. Closing a credit card account can negatively affect your credit score, so make sure to close them slowly over time to minimize the impact.

Another important thing to remember is that you may not always be physically or mentally able to handle your affairs. That is why it is so important to have someone else available to handle your affairs. You will need one durable power of attorney for health care and one for finances, but they can be the same person. This person will ideally be someone younger than you, who has access to your accounts and is capable of handling your affairs when it becomes necessary. You should make sure they have access to your will or trust, medical directives, financial records, property deeds, birth certificate, Social Security card and other important documentation.

Estate planning is essential to protect your assets and take care of your beneficiaries. Consider talking to an attorney to assist you with all your estate planning needs.

Source: USA Today, “Estate planning: How to ‘death clean’ your finances,” Liz Weston, Dec. 29, 2017