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Prosperity: Ready for ‘what if’?

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4 actions that will keep your financial house in order in case of an emergency

By Michael MacFarlane, Northwestern Mutual Financial Network

Front row L to R: Mike Kunzler, Rene Saenz, Blake Horton, Nate Tadje, Mike Macfarlane, Jenn Larson, Rob Dowdle, Trent Mano. Back Row L to R: Will Beck, Jake Rust, David Carruth, Tim Hodnett, Jeff Barrett, Ryan Ericksen, Tyler Vongsawad.

Front row L to R: Mike Kunzler, Rene Saenz, Blake Horton, Nate Tadje, Mike Macfarlane, Jenn Larson, Rob Dowdle, Trent Mano. Back Row L to R: Will Beck, Jake Rust, David Carruth, Tim Hodnett, Jeff Barrett, Ryan Ericksen, Tyler Vongsawad.

When an unexpected illness or accident strikes, many people rely on family and friends to help handle the emotional and physical challenges that follow. To manage financially, however, advance planning is the way to ensure you can meet your goals in the event of a crisis.

When you make the effort to prepare, loved ones will be cared for and your goals will be achieved even if something unexpected happens. Here are the essentials of advance planning to put your financial house in order.

 

1. Create a financial security plan.

Make sure your plan protects against risks to your income and assets — and accumulates funds. It typically includes a combination of disability insurance and life insurance for risk protection as well as investment products for wealth accumulation. Your financial representative can help you develop the right plan for you.

 

2. Formulate an estate plan.

A good estate plan fully protects your family by providing for loved ones and anticipating unexpected events. It considers tax implications and your specific needs while minimizing expenses and ensuring assets are distributed efficiently. Some elements of an estate plan, such as life insurance and investments, may be prepared with help from your financial representative. Others may involve an estate-planning attorney and include the following:

• Create a will. This legal document defines who will receive your money, property and family heirlooms. It specifies charitable contributions, names an executor and designates a guardian for your children. If you die without a will, these matters will be decided by state law and a court, often adding expense and slowing down asset distribution.

• Designate and update beneficiaries. Certain financial vehicles in your name are automatically disbursed to the beneficiaries you designate upon your death. Be sure to update these documents periodically.

• Establish a durable power of attorney. This designates a person to act on your behalf, in the event of incompetence, to handle personal financial affairs.

• Establish durable power of attorney for health care. This allows a specified person to act on your behalf regarding health-care decisions when you are unable to do so. Be sure to discuss your health-related issues and wishes and confirm the person will carry them out.

• Set up a living will. This document is a direction to your physicians with your wishes regarding life-sustaining treatment.

 

3. Consider a trust.

This legal mechanism allows you to put conditions on how and when your assets will be distributed upon your death, such as if heirs are too young or unable to manage assets themselves. Some trusts also allow you to reduce estate and gift taxes, and certain trusts distribute assets to heirs without the expense and time involved with probate court, which administers wills.

 

4. Plan your legacy.

In addition to providing for heirs, careful estate planning can help you leave a legacy through a charitable bequest. Your financial representative can help you identify options that could be incorporated into your plan.

What better resolution for the New Year than getting your financial house in order? Regardless of family situation or assets, having a plan to deal with the unexpected allows you to protect your family and ensure they have what they need if something should happen to you. Your financial representative can help you move forward on these important areas or introduce you to a specialist or attorney who can.

DISCLOSURE: Article prepared by Northwestern Mutual with the cooperation of Mike MacFarlane and the Edgewood Group. The Edgewood Group is an office of Northwestern Mutual. Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company, Milwaukee, WI (NM), and its subsidiaries. Mike MacFarlane, District Agent and Rob Dowdle, Ryan Ericksen, Kurt Peterson, Jake Rust, David Carruth, Greg Merrill, Tim Hodnett, Tyler Vongsawad, Will Beck and Jeff Barrett, Insurance Agent(s) of NM (life and disability insurance, annuities) and Registered Representatives of Northwestern Mutual Investment Services, LLC (NMIS) (securities), subsidiary of NM, registered investment adviser, broker-dealer, member FINRA and SIPC. Mike Macfarlane, Ryan Ericksen, Kurt Peterson, Scott Phillips and Tyler Vongsawad, Investment Adviser Representative(s) of NMIS.  The products and services referenced are offered and sold only by appropriately appointed and licensed entities and network representatives. Network representatives might not represent all entities shown or provide all the services discussed. To contact Mike MacFarlane, please call (801) 225-8000 or e-mail mike.macfarlane@nmfn.com.

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