Who manages the finances in your household? Often, maintaining a home is split between spouses, roommates, etc., which helps with everyone's sanity as not to overwhelm one person with all the tasks. Everyone must be familiar with the other's contribution to the home upkeep; however, sharing or documenting the details of the financial management side is even more important.
Does your family have a designated "CFO?" Just as businesses have succession plans in the event leaders cannot serve, families must also take a similar approach. The family CFO knows when bills are due and how to access investment accounts. If no one else has that information, unnecessary stress will be created if/when another member of the household needs to step in to help. Your family should proactively take steps to document the role of "CFO."
The household CFO should compile a list of assets/liabilities, associated login credentials, and pertinent details. Bank accounts and investment accounts will come to mind first. But don't forget to include physical stock certificates, safe deposit boxes (and the location of the key), and health savings accounts. Titling of assets should be noted and the location of important documents, such as deeds and titles to vehicles/boats. Please review this information a few times a year to ensure it is kept current, especially passwords.
A list of household bills should also be drafted, including how they are received (regular mail or email) and paid. For example, is your electric bill set up on auto-pay or do you initiate a payment every month? The CFO will need to include login credentials for these accounts as well. Bills that are due infrequently, like insurance premiums and property taxes, should also be noted.
Don't forget to document all insurance policies: homeowners, auto, life, disability, health, and long-term care. Be sure to include the insurance broker/contact person, telephone number, premium amounts, payment schedules, beneficiary designations, and location of policy documents for each. The insurance policies help cover risk, but you can't utilize them if the right people can't access them or know they exist.
Next up, digital assets and accounts. The first thing that comes to mind might be cryptocurrency. Yes, that's very important, but also be sure to note any personal photo libraries or rights to domain names. Making a list of all email accounts, social media profiles, and other online accounts, along with their respective login information, is very important. Access to the related email accounts is also necessary should your family reset a password or retrieve e-statements.
Ensure that another household member knows where to find the CFO's estate documents (i.e., last will & testament, financial power of attorney, health care power of attorney, and living will documents). By the way, when was the last time an estate attorney reviewed those documents? If it hasn't been within the previous five years, it would be ideal for the CFO to make an appointment with an attorney to review them as soon as possible. Life, along with estate tax laws, change. The documents must remain current amidst these changes. Even if a household member knows the location of the documents, the appointed financial power of attorney and health care power of attorney must have a copy of the respective document as well. The CFO's medical provider should also have a copy of the living will.
Creating a thorough inventory of the items above will undoubtedly take some time. However, gathering the information with a clear mind is much easier than trying to piece together all the relevant material during an unexpected event. Even worse if the family has to do it alone. If your family CFO has already organized the financial detail of your household and shared the information with the appropriate individuals, congratulations! You should have peace of mind knowing that most, if not everything, financial-related will be manageable for the successor CFO.
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