Money Strategies for Major Life Transitions

Major life transitions, like a new job, a marriage, a new baby, a move, an illness or a loss, can turn your finances upside down. In this Cultural Coins conversation, CHIP founder Dana Wilson talks with four pros about how to plan before life forces your hand: financial advisor Cathey Williamson, president and CEO of Williamson Financial Management Group; Alaina Fingal of The Organized Money; estate planning attorney LaShay Callaway of Callaway Law Group; and estate planning and probate attorney Olivia Smith.

Key takeaways

• Everyone thinks they have more time. Planning is for any adult, not just retirees.
• You’re far more likely to be incapacitated at some point than you think. Plan for that too.
• Choose the right people for each role, not just the oldest child.
• Keep one organized list of your accounts, policies, property and passwords.
• Build your team before a crisis, and review your plan every few years.

Why everyone thinks they have more time

Alaina often works with widows who lost a spouse far too soon, with nothing organized. They faced family fights, no access to accounts and sometimes no life insurance, all while grieving. Olivia, whose firm focuses on seniors, sees the same thing with older clients. Most people avoid thinking about incapacity, long-term care or death. But not planning can drain your savings and keep your legacy from reaching the people you love.

Plan for incapacity, not just death

LaShay works with many younger clients. Her question is simple: do you have anything you don’t want the state to decide about? If the answer is yes, it’s time to plan. You’ll likely only die once, she says, but you could be incapacitated several times in your life.

Once your child turns 18, you can’t automatically make their medical or financial decisions. College students need a power of attorney and an advance health care directive. The same goes before an international trip. Who can pay your bills or talk to your doctors if you’re stuck in a hospital? Alaina shares a client who got sick abroad without travel insurance and had to raise cash from family to cover the hospital bill.

Plan out of love

LaShay reframes estate planning as an act of love. If you don’t write down your wishes, like whether you’d want life support, your family has to guess during one of the worst moments of their lives. She also suggests a natural way to start the talk with parents: “I just did my power of attorney. Do you have one? Who has a copy?”

If you used an online or prepaid legal service, have a local attorney review it. LaShay has seen documents that didn’t follow her state’s laws or said something very different from what the client wanted.

Get organized: your “money on one page”

Cathey asks every client for a full list of accounts and statements, plus a trusted contact. Forgotten accounts can force a family back into probate. Alaina’s clients keep a secure document listing every account, policy and password, and someone they trust knows where to find it.

Olivia adds that people often don’t know what they own. A house may still be titled with an ex-spouse, or a client may not be on the deed at all. Her firm’s intake questionnaire checks every asset first. And remember, life insurance and accounts with named beneficiaries usually pass outside your will. The beneficiary form wins, so keep those forms up to date.

Pick the right people

Don’t name someone power of attorney or trustee just because they’re the oldest. Choose people you trust who have the skills to do the job. Talk to them first to make sure they’re willing. If two siblings don’t get along, don’t make them co-executors to avoid hurt feelings, since that can make things harder and more expensive for everyone.

Blended families need extra care. In some states, stepchildren don’t inherit unless you plan for it. Both spouses should also know how the household runs: where the accounts are, how bills get paid and whose name is on what. Olivia shares how one spouse couldn’t pay the mortgage or access accounts after her husband was injured, because nothing was in place.

Build your team and take the first step

Cathey tells every client they need a team: an estate planning attorney, a good CPA and a financial advisor who all talk to each other. As she puts it, you need a team before you get to the millions, because that’s how you get there. Learn more about why your financial team should talk to each other.

You don’t have to plan your whole life at once. Start with a list of what you own and who your people are. LaShay calls them your rainy day documents. Then review your plan every three to five years as your kids grow and your wealth changes.

Want more conversations like this? Watch more Cultural Coins episodes.

This article is for education only and isn’t legal or financial advice. Estate planning laws vary by state, so talk with a qualified attorney about your situation before making decisions.

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