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August 2, 2011

Financial Planning is a lasting gift

When my wife’s niece’s husband died no one knew what to do first.  He was young, about 37, apparently in excellent health, with 2 young children.  They did not have wills, living trusts, Powers of Attorney and other elements of a financial plan .  If they had a financial plan the financial stress could have been substantially reduced.  It is difficult enough to deal with emotional stress without adding financial stress at such times.
Many people postpone financial planning thinking it isn’t time yet.  They may consider themselves to be too young, are in excellent health, are organized, or they are just procrastinators.  Sometimes parents cannot agree on a guardian for their children or couples cannot agree on a trustee.  If they do not name someone, the decision will be made without their input.  
With out planning, including updating beneficiaries, excess taxes (income and/or estate) may be payable or assets may go to people that do not have the capacity to mange the assets.  There have been situations where retirement accounts went to ex-spouse rather than the current spouse. 
The planning should be communicated.  Your wishes should be discussed with partners, children, or others that are to receive assets or who will administer the plan.  This includes the contact information for advisors, financial institutions and passwords and PINs.
Sharon Epperson, a CNBC correspondent , recently expressed her gratitude to her father for planning.  The article concluding sentences are very powerful “My father left us a wonderful gift.  his desire to make sure he had a ‘Financial Plan B’ in place is a legacy that truly underscores the love he had for his family.”

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