What Financial Mess Will You Leave Behind?

What Financial Mess Will You Leave Behind?
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When a person dies, what kind of mess is left behind for survivors and beneficiaries?

I’m not talking about a garage full of collectibles or leftover tools and home improvement supplies. I’m talking about financial situations.

Think ahead: Pull out statements on all your financial accounts or write down a list of all your financial positions. Think in terms of all the places you pay someone or they pay you: Savings, investment, and retirement accounts. All the insurances. Loans. Credit cards. Mortgages. Properties. Precious metal holdings. Online accounts with automatic payments – Netflix, Amazon, streaming TV apps, banks, investment firms – or with automatic renewal programs that charge a credit card or bank account, such as regular donations.

If you have a hard time remembering or managing all the dealings, put yourself in the shoes of the person inheriting the mess. They are not involved with it on a daily, weekly, or monthly basis. They are clueless and overwhelmed during a vulnerable time.

Take time to simplify your financial life. Consolidate similar accounts. Get rid of programs you don’t use regularly. Make a list of user names and passwords; without that list, survivors are locked out of managing the online accounts.

[DOWNLOAD: MOAA Premium and Life members can access financial guides on estate planning, survivor benefits, and more]

Establish beneficiaries for your accounts. Some financial products, such as retirement accounts and insurances, have beneficiaries; others, like bank and investment accounts, can have beneficiaries designated.

The bottom line: Don’t assume what’s second nature to you will be easy for a survivor.

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About the Author

Lt. Col. Shane Ostrom, USAF (Ret), CFP®
Lt. Col. Shane Ostrom, USAF (Ret), CFP®

Ostrom retired from the Air Force in 2000 and joined the MOAA team in 2006. His responsibilities include researching and answering member inquiries regarding military benefits, health care, survivor issues, and financial concerns.