Money Matters: Who is Your Financial Data Buddy?

Imagine walking into the house of someone close to you, perhaps a dear friend. She’s just had a stroke and will be incapacitated for several months, perhaps permanently. You’ve offered to keep her daily finances afloat while she is unable to do so for herself. In her legal papers, you are her named agent. Where would you start?

What bills need to be paid each month? What are the passwords to relevant websites? Who does she pay regularly in cash, e.g. for house cleaning? Who are her financial advisors? Who is the vet for her dog and who shovels her snow? Where is the dry cleaning? Where does she keep her financial papers in her house? What close friends and colleagues would she want to be notified of this new turn in her life?

You can be very close to someone and have no clue about any of these matters. It would be a daunting task to be helpful. That’s exactly the situation the named agent in your legal papers will be in unless you provide relevant information now while you are still well.

What if, instead, you had already set up a system where you had exchanged information with a financial data buddy? Perhaps at Thanksgiving each year or at the annual family summer reunion you swap a notebook or a flash drive with the information your financial data buddy would need in order to be immediately helpful at a moment’s notice. Maybe initially you’ll just exchange a house key, the security code for your alarm system, and a piece of paper saying where the financial papers are in your house, including relevant web access information and a current map of your financial life. Or maybe you’ll swap more information, especially if you are not geographically close to each other, or if you have minor children living with you.

Whether you live near or far from each other, remember that your named agent needs a copy of relevant legal documents, e.g. the financial Power of Attorney authorizing your agent to act on your behalf and/or a copy of your revocable trust naming your agent as a co- or successor trustee.

What information would you have at the ready each year for your financial data buddy if you were to take this idea a step further? Take a look at this Roadmap for Heirs. It’s a pretty comprehensive list. You would not set a goal of putting all this information together at once. A good start would be picking the sections that are most important to you and beginning there. Decide whether your agent needs that information in their possession, or just available if needed.

Later on you can consider when it might be time for your named agent to meet your financial advisors, or to see more details of your financial life. Or to hear from you what has particular meaning, what you care about, what your preferences might be if someone needs to act for you on your behalf. These are tender topics. If you have young children, you’ll be talking about your deepest values as a parent. If you are older, you’ll be talking about end of life preferences.

No one really likes pulling together this information. Yet once this safety net is in place, there can be a tremendous sense of relief, personal satisfaction, and peace of mind. It’s worth serious consideration.

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