“There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don't know.”—Donald Rumsfeld
Often we contemplate the occurrence of an unforeseen life-altering event in a fleeting way. Sometimes we do so after hearing an alarming news story such as a mass shooting, a plant close-down or a tragic airline crash. Perhaps we consider these events when a relative passes or requires transfer to a nursing home. Many of us do not take the steps necessary to plan for the unexpected. Even those who have at one time taken steps may not have covered all the bases or revisited their steps.
As financial professionals, we work with our clients to assist them with making the best out of difficult situations. All too often, some planning and a little foresight could have saved the client and or their family heartache and resources.
As few examples will help illustrate the point. In the event the family breadwinner is injured, laid off or, in the worst case, killed, what will the family do? Has money been set aside for emergencies, is there life, health or disability insurance in place? If the loved one is incapacitated, who will pay the bills, check the accounts online, pay taxes or otherwise handle financial affairs? Is there a power of attorney form in place to allow for banking while the loved one recovers? In the event of a death, does the family know if there is a will, and how to locate the loved one’s assets and various accounts? Has the family discussed funeral arrangements or future educational needs of the children? To whom will the family member’s assets pass at death? If you are a business owner, who will take over for you?
Many other issues come to mind that should be explored and planned for with family. Have you designated a health care proxy? That is, someone to receive your health care information and make decisions if you are incapacitated in the hospital or a nursing home. Do you want to be resuscitated if you go into cardiac arrest? Do you want to be kept alive on life support if the doctors do not believe you will recover?
If you have children, and you and your spouse die in a common disaster, whom would you prefer to serve as guardians? How would you want your personal possessions to be divided in the event of your death?
Where are your important documents such as your will, deeds, mortgages, passports, licenses, car registrations, insurance policies, checkbooks, contracts, leases, bank account statements? Can a member of your family access your computer for financial records, personal contact numbers or other relevant information they will need? Are there advisors the family should contact for assistance?
Planning for the unknown or unforeseen life event may require the input and involvement of family, friends and/or advisors. Have you addressed all of these items and, if so, have your wishes changed since you last took action? Many of these questions may be of greater or lesser importance to you. Often, their relevance and importance will change over time. If you have already done some planning, consider updating the plan. If not, and if not now, consider spending some time on the unknowns in the near future.