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While no one expects emergencies, many people still find themselves facing unexpected or catastrophic events.
Having the proper financial documents and information in place can be a huge help to your family in the event of your death or could even help you navigate the aftermath of a disaster you survive.
“It’s an act of love; you’re helping your family,” said Jim Shagawat, a certified financial planner and partner advisor at AdvicePeriod in Bergen County, New Jersey.
Here’s what financial advisors recommend having in place to make your finances as disaster-proof as possible.
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Key documents for all adults
There are a few important documents that experts recommend all adults have in place, regardless of their age or wealth.
Health-care directive: A health-care directive allows you to specify what kind of medical treatment you would like to have if you are not in a state to give consent. You may also want to have a medical power of attorney, which means you can appoint someone to make health decisions for you if you’re unable.
“It covers the kind of worst-case scenarios that none of us really likes to think about,” said Bruce Colin, a CFP and president of Bruce Colin and Company, an independent wealth management firm in Rancho Palo Verdes, California.
A health-care directive is generally simple to fill out and may vary by state. If you move to another state, you should check with an attorney to see if you need to update this document or get a new one.
Durable power of attorney: A durable power of attorney applies to your property and finances. This document allows you to designate someone to take care of your money and other assets if you cannot. For example, if you’re in a coma, it would give your appointed person the ability to pay your bills.
You should check if the financial institutions you work with have their own process for naming people who can access your account in an emergency, said Colin. Some banks won’t recognize a power of attorney and have their own forms that need to be filled out, he said.
Once you have your document drawn up, go to your bank and ask if it will be accepted, said Colin. If it’s not satisfactory, you can fill out the correct paperwork right away.
Last will and testament: Having a will is especially important for people who have assets they want to …….