Legacy Planning and talking to your loved ones about the potential of losing you is never easy, especially if you’re struggling with your health or have been recently diagnosed with a terminal illness. But from a practical standpoint, it’s important as an integral part of risk management. Risk carries the possibility of loss that can affect personal property, financial legacy, and your dependents. You can think of risk management as the process of identifying your risks, analyzing how you want to accept or mitigate them, and implementing a strategy to do so.
The goal of personal risk management is to protect all the resources you create: your goals, dreams, wealth, and well being. While you may not be able to eliminate all of them, you can at least cover the risks that are most affordable to reduce your overall financial stress.
The goal is not to eliminate all risk, but instead to avoid or minimize the potential downsides to yourself and your family. With clarity and planning, you can manage your risks and better prepare for unexpected life events, safeguard your financial status, and protect your loved ones.
Here are some examples:
- Life Insurance
- Disability Insurance
- Personal Property & Liability Insurance
- While this isn’t insurance, another way to protect what you have is doing Legacy Planning (often called estate planning, where you work with an attorney to create legal documents to direct your assets after your death)
Here are some things to keep in mind when you are legacy planning:
Find an estate attorney: One of the first steps to take to protect your estate is to understand the legalities associated with it. If you have a particularly complicated estate, a lawyer can be very helpful in helping you understand it and plan for your future. Your Willow Financial Coach can also be a good place to start your journey of finding the right attorney.
Make a list of all your assets: your attorney will probably also ask you to do this as a first step so it would be beneficial to have this list ready to take to them. Make a list of all your assets, money, investments, properties and even inheritance in order to plan for your future.
- Keep all your legacy and estate documents in a safe place: This is a very important but often overlooked step. If someone had to step in and access your documents without your help, would they be able to do it?
- Assign beneficiaries to your life insurance policy, bank accounts, annuities, investments, and retirement funds: This is another step that can wreck your best laid plans.
- Talk to your doctor about your options and your family about your wishes: If you are facing serious medical issues, be sure to consider your preferences in cases where you might not be able to articulate them. For example, make your opinion about a DNR (Do Not Resuscitate) order clear to instruct health care providers of your wishes under certain scenarios. These can be very difficult choices for you and your loved ones, so it’s important to communicate these preferences ahead of time whenever possible to prevent the heightened emotion of this situation from interfering with your wishes. As you talk to your loved ones about it, recognize that however difficult the discussion may be, people who tackle financial discussions head on are less likely to feel isolated and are better able to prioritize other aspects of their health, wellbeing and future. Having open conversations with your partner, parents, siblings, and children help you and your loved ones become more financially healthy. And the time to have this conversation is now, when a crisis hits it’s too late. The best time to talk about it is before the diagnosis, when everyone is healthy.
Team Willow is here to help in this process. Legacy planning is one of the most important elements of future planning, not just for you but for your loved ones as well!