How to plan for the inevitable

Through my 20-plus years in financial planning, I know most people don’t like to discuss death and disability. But avoiding them can cause financial trouble and even ruin.
Consider ahead of time what’s best for your estate should you die or become incapacitated, to minimize the headache and the heartache. Here are five moves to consider:
Square away beneficiary designations. I’ve worked with people who inadvertently had their ex-spouse listed as a beneficiary on IRAs, life insurance or the like. I’ve even had cases where the ex-spouse was a joint owner on investment accounts. If that’s your intent, fine, but in most cases it probably isn’t. Examine all your accounts and employer benefits to ensure you’ve named the correct person.
Include the right people in your plan. Whether you’re naming an agent to make decisions for you in the event you can’t, selecting an executor or successor trustee to manage things when you’re gone, or choosing who will take care of your kids, go with the A team to make sure it’s done correctly. And remember: the A team 10 years ago may not be the A team today.
Establish a game plan. Your wishes don’t instantly translate into action. To make things happen after you’re gone, you will need to establish wills, trusts, powers of attorney (both medical and financial), and a letter of instruction detailing your wishes and providing what your key players need to know when the time comes. A qualified estate-planning attorney can help you assemble the plan.
Update your plan. When I started in this business in the early 1990s, the estate tax kicked in at $600,000. That has since changed, so if the plan you’re using today was drawn up in accord with that rule, you could face unintended consequences. In the same vein, financial institutions may be less likely to recognize a 25-year-old power of attorney than one drawn up a couple of years ago.
Review your insurance. Life, disability, long-term care and health insurance all have direct or indirect effects on your estate planning. Have you asked yourself if the policy you bought 30 years ago makes sense today? If you haven’t, it’s time.

J.J. Montanaro is a certified financial planner with USAA, The American Legion’s preferred provider of financial services. Submit questions for him online.