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Does Anyone Know Where Your Money Is?

Does Anyone Know Where Your Money Is?
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Even those who have saved and invested well may not be sharing their financial information with a spouse or loved one. It’s time to do that now.

A man is in a coma and the doctors say he probably won’t make it.

His impending death is devastating, but things are about to get even worse.

No one in his family, even his wife, knows enough about his savings, investments, debts, or other financial matters.

The family doesn’t know even who his financial advisor is, if he has a will or how much money is available to pay bills—which are piling up rapidly.

Even if they know he has bank accounts, the family will have to work with bank representatives to get access to the money.

This family’s story is not unusual. However, an estate plan that includes preparations for incapacity as well as death will prevent many of these problems. If you’re lucky, the incapacitated person shared his wishes with his wife or a family member. Hopefully there was a Power of Attorney in place, so bills could be paid. But if not, what can you do if faced with this same scenario?

Get Tax Returns

If someone you love is incapacitated, finding the most recent tax return will yield a lot of information. Tax returns will have the name of the person who prepared the return, assuming the person used a CPA. The tax return will also document income and possibly list assets. Information like earned interest, dividends, pension income and withdrawals from retirement accounts will be on the tax return.

Schedule B on a tax return can reveal some surprises for family members. If there are no paper records or log-in information to financial websites, ask the tax preparer for a copy of the 1099 form for each asset. Once the list is complete, put together the information, along with all insurance company information and the tax return, into a large envelope to be reviewed once a year.

Other Documents You’ll Need To Find

Here are the documents most people need in case of incapacity:

  • Will, Financial Power of Attorney and Trust Documents, if any exist. Some estate planning attorneys keep original wills for clients, but not all do.
  • Bank, Investment and Social Security statements
  • Information for all online assets, including financial assets, websites, business accounts and cryptocurrency
  • List of all Retirement Accounts, annuities and life insurance policies. Call the human resources department where the incapacitated person worked. They may be aware of a life insurance benefit or a 401(k) account.
  • Cost basis of all investment in taxable brokerage accounts or stocks
  • A list of any assets of value, including real estate and automobiles
  • A list of debts
  • Most recent tax returns

How You Can Avoid Having Your Loved Ones Go Through This Scenario

Contact your estate planning attorney to find out what would happen if you became incapacitated and be sure to have the necessary documents created or updated, including a will, financial power of attorney, health care power of attorney and any trust documents.

A copy of your Social Security card, birth and marriage certificates and your estate planning documents can go into a big envelope marked “Legal Documents” and placed in a secure location, also to be reviewed annually.

Tell your executor and trusted family members where these documents are, so they can be accessed when needed. They will be able to act on your behalf in the event of incapacity and you will have spared them unnecessary stress and expenses.

Conclusion

The person in this example was admitted to the hospital and their health deteriorated so rapidly that there was no time to make any proper arrangements. We never know what the future will bring. That’s why it’s so important to have an estate plan and to gather information on finances and assets—and to share this information with loved ones.