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Putting your financial house in order.Wednesday, June 8th, 2016 | Matt Boyce
The floods in Texas and fires in Canada should make us all take a moment to think about what we would grab if we had to evacuate our homes in a hurry. We’d want our kids, the pets, our family photographs – but what about our important documents?
People who sail or are familiar with boating safety know that every smart skipper has a “ditch bag” – a waterproof duffle bag filled with essentials to throw in the life raft if the boat sinks. It might contain a satellite phone, rations, water, medicine, mirrors to use to signal rescuers, flares, GPS, survival blankets, foul-weather gear, life jackets, fishing equipment, batteries, a radio – anything that would increase the possibility of rescue and survival. The ditch bag is kept in an easy-to-reach area so it can be grabbed quickly.
“Your financial records are just as important and should be kept together in an easy-to-access place so you can find them immediately when needed,” advises Leslie Kelly, the founder, president and CCO of American Financial Advisors, Inc., and a Registered Investment Advisor. Kelly has more than 30 years of wealth management experience guiding the financial and life-planning goals of AFA’s clients.
“There should be a central location where your wills, trusts, living wills, healthcare proxies, life insurance policies, health insurance, homeowner policies, auto insurance and copies of birth, marriage and death certificates should be kept, along with a list of investment accounts, Social Security numbers and locations of safe deposit boxes and their keys. Lists of contact information for your attorney, life insurance agent, financial advisor, CPA, etc., should be included.”
Think about what else you need close at hand so that your life, already disrupted by disaster, can be put back on track: copies of drivers’ licenses, credit cards, employer retirement plan documents and titles to your cars.
Some people keep these in a home safe, but each family member needs to know the combination. Just as the equipment in the ditch bag needs to be checked from time to time to make sure the flares haven’t expired, the batteries still work and the rations are still good, your financial documents need to be reviewed at least annually. Kelly notes that she has seen large estates go to an ex-spouse because the wills and life insurance beneficiaries weren’t updated, or children are excluded because they weren’t added. Wills need updating at least every five years – more frequently if the laws or your situation change significantly. Over the years she has seen clients with homeowners insurance that barely covered the cost of the home, let alone its increased value many years later. Update your insurance coverage on a regular basis.
If your documents are stored digitally, make sure you include a flash drive containing the data along with hard copies of your documents in the event your computer is not functional – and remember to update the information whenever you revise your documents.
Like anything else in life, being forewarned is forearmed. Be prepared. And be safe.
About American Financial Advisors
American Financial Advisors provides comprehensive financial planning strategy and counsels clients and their families, all based on the firm's core principles of accountability and mutual success. AFA specializes in financial advising, estate planning, trust services and business advising. For more information on AFA and its services, visit AFAdvisors.com.
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