Complete Your Final Documents

By Deborah Jeanne Sergeant

Spoiler alert! No one makes it off planet Earth alive. To make this time easier for your loved ones left behind, get your final documents in order.

Phil Provenzano, certified Social Security specialist and financial adviser with The Financial Guys in Rochester, said that financial documents should include a true financial plan organized by a professional financial adviser.

“I know this sounds clichéd and an easy answer for everything. However, it is so true: speak to an adviser because each person has a different situation and they will need different plans in place,” Provenzano said.

Before meeting with a financial adviser, get your paperwork and information together. Provenzano said that in general, a financial adviser needs:

• Social Security statements

• Healthcare costs and needs

• How much your everyday lifestyle costs (expenses and what do you want to live off of in retirement)

• Pension amounts

• Asset statements

• Current income and future income from work, Social Security and pension

• Goals in retirement, such as leaving a legacy to relatives, donations traveling, etc.

• What issues can the adviser help you resolve

“If an adviser doesn’t ask you what your goals are, what you want to accomplish in your retirement years and information to gather a roadmap, then walk out and do not look back,” Provenzano warned.

Documents you will need to create include a will or trust. The latter is preferred by Tomás Gonzalez, attorney, assistant professor and coordinator of the paralegal-legal studies program at Finger Lakes Community College in Canandaigua.

“On the front end, a will may be cheaper and easier to complete; but on the flip side, it’s public,” Gonzalez said. “It will become public. There may be difficulty with heirs receiving through the will that information is exposed. Trusts keep all of those issues private as to the distribution of assets. It can shield from creditors. When a will is probated, the creditors are first in line.”

Although many people think that only the wealthy can use trusts, Gonzalez said this is not true.

“In addition to whatever document is used, often there’s a final piece, a remainder that says anything not articulated is distributed equally,” Gonzalez said. “But you should articulate what those assets are. Your executor will have to pull that together. List those assets so the executor isn’t having to run around figuring that out.”

Gonzalez said that it’s also important to make sure the will and other documents are stored correctly such as in a home safe and deposited with an attorney. A safe deposit box at the bank may be very secure, but it can be difficult to access if the key is mislaid or when the holder passes away. Family members should know where the documents are stored.

In addition to a will or trust — documents stating where your money will go — you’ll need documents related to who will make important decisions should you become incapacitated. These are the healthcare proxy and the power of attorney designations.

The healthcare proxy is a person you choose who will make healthcare decisions if you cannot. For example, if you are unconscious or otherwise lack the ability to decide what steps to take in your healthcare, the proxy would decide on your behalf based upon your wishes. Of course, it is necessary for this person to agree to function as your healthcare proxy and to discuss your wishes. Will you want every measure taken to extend your life? What if the care provided meant you would live in a vegetative state, dependent upon 24-hour care?

“If you’re in the hospital getting treatment and your adult child said they’re the healthcare proxy, the doctor will need to see the proxy document so they can speak for you,” said Jeff Feldman, Ph.D. and certified financial planner with Rochester Financial Services in Pittsford. “Get the proper document and make sure the people who need that document will have access to it.”

Tucking them all in a desk drawer or locking them up in a safety deposit box at the bank that only you can access will not benefit you or your family. Your healthcare providers should have copies in your file and the person named should also have a copy.

In a similar sense, the power of attorney documentation designates someone to handle your financial affairs. Again, discuss your desires with the trusted person you select and make sure your documents are where this person can access them.

“That way when you’re incapacitated, that person has the POA,” Feldman said.

The persons you select for the healthcare proxy and power of attorney may be your spouse, an adult child, other relative, trusted friend or an attorney or other professional. Select and designate back-ups also.

Some people choose a living will, but Feldman said that it’s tough to foretell what will happen to your health in the future and how you will feel about it then. That’s why he thinks the healthcare proxy is a better idea.