Managing Your Family’s Financial Affairs When You Are Not Able

During a recent meeting, a family asked me, “Who will be able to help my family manage our financial affairs when I am no longer able?”

The person who asked the question took the sole responsibility for managing her family’s financial affairs and was able to build a sizeable investment portfolio and a retirement plan that allowed both her and her husband to thrive during their retirement years.

When I first speak with families, they generally hear me talk about risk management, not investment management, for a good portion of the initial conversation.  Usually, risk management is what people don’t understand, or if they do understand it, it is not a topic that they feel very comfortable talking about.

Even though it’s known that we will eventually pass on, death is not a topic people like to discuss, and who could blame anyone for that?  However, when it comes to being able to see your final wishes through to completion, protecting your family from a catastrophic financial event, or ensuring that your children are properly taken care of in your absence, wouldn’t you want to have a plan and someone there directing that plan on your behalf?

Strategic Apathy

In this age of social media, where it’s easier than ever to care or be outraged about something new every couple of days, people should give credence to what matters most to them and, thus, what they should focus on.

This notion that I am referring to is what Josh Kaufman, author of the book The Personal MBA: Master the Art of Business, calls strategic apathy, “making a conscious, deliberate choice to not care about the forms of status that don’t lead us toward the fulfillment of our current priorities or long-term goals.”

So how do you make strategic apathy a part of your financial life?  This directly relates to having a plan, whether it is for your estate, insurance, or emergency planning needs.  All these pieces are what I consider to be a part of the risk management phase of having a complete wealth management plan.

So what can you do to get started? 

Make a conscious decision to sit down with someone to do the following:

• Help draft the necessary estate documents that help dictate who would take care of your family should something happen to you;
• Understanding how much protection you need from a financial standpoint to take care of liabilities and goals again if something should happen to you;
• Or know how much you need in a liquid account to cover 3 to 6 months of living expenses.

The person I referenced earlier who asked, “Who will help me if I am no longer able,” was strictly focused on only one aspect of her wealth management plan, the asset management piece, and not the risk element.  She ensured she was saving enough, controlling her family’s expenses, and working with someone who could help with individual investments and asset allocation decisions.

However, she left out one crucial piece, who would carry on after she was gone. I confidently looked her in the eyes and told her that person would be me.  Don’t overlook the critical pieces of life that you need or should care about most, only to become distracted by the current social media events of the day.