Now that you're on your way to wealth, it's time to think about your financial responsibilities to those you love. A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life. Please take the following simple actions for your own peace of mind and for the security of your loved ones.
Steps to help you take financial responsibility of the future:
- Create a will. Without one, a state court will decide who gets which part of your individual assets, and your loved ones may not get what you want them to have. For a few hundred dollars or less, an attorney will draw up your will; you can also buy a form will at a stationery store or order a will-writing kit.
- Create a revocable living trust. In addition to a will, many of you need this statement of who will control your assets while you're alive (typically, you) and who will receive them once you die. It will help your heirs avoid the expensive probate-court procedure necessary with a will alone. An attorney can draw up a living trust and fund it with your assets for about $1,000 to $3,000, or you can get a computer program and do it yourself.
- Draw up an advance directive and durable power of attorney for healthcare. These documents sound complicated, but they're not. The advance directive states what medical intervention you want—and don't want—in case you're incapacitated, and a durable power of attorney for healthcare appoints someone to make medical decisions for you in case you can't. You can find ready-made forms in stationery stores, or, again, get a computer program.
- Create a durable power of attorney for finances. This appoints someone to act on your behalf in financial matters—writing checks, paying bills—should you become unable to act for yourself. Consult an attorney about this document since the language needs to be carefully crafted to avoid any possibility of abuse should it become active.
If you have at least these documents in place, you'll have taken some very important steps to make your loved ones safe.