When the doctor tells you to get your affairs in order, don’t. If you couldn’t get organized under the best of circumstances, impending doom won’t make it easier. And don’t imagine a half-hearted effort helps your family. When death is imminent, anything you might attempt in a panic is better done by someone else once you’re gone, or at least comatose.
Instead, tell the doctor to get his or her own affairs in order and go do something fun. If family nags, inform them you’ll bother when you feel better, except to disinherit those that annoy you.
This advice is anathema to planners, but most people won’t plan to save their lives. Most people should stop reading here.
To get your affairs in order, make a will, sign powers of attorney, list your assets, prepare a cash flow statement, and leave all where your family or agents can find them. A safe deposit box is a good investment. Don’t forget passwords, or, better yet, the credentials to your password manager. Absent passwords, throw in year-end statements for each account, for contact information and a semi-recent balance.
Decedents’ estates exit probate one asset at a time, not one will at a time. The better organized your business, the lower the lawyer’s bill.
However, disability, not death, is the main reason to get organized. Organization extends the time you remain in your own home. The more manageable your business, the longer you yourself can manage it. When you cannot manage alone, a C.P.A. or bookkeeper will be more enthused and less expensive if your business is tidy. Likewise, family and friends can do more for you, and longer, if they are not confronted with an unholy mess. Disorganized packrats go to the nursing home first.
A balance sheet, listing debts and assets, is useful for financial and estate planning and when probating an estate. But to help friends or family help you, nothing beats a cash flow statement, to plan for utilities, out-of-pocket medical and prescription expenses, property and income taxes, and other essentials of independent living.
Useful models are available for download below. Here is a copy of the Excel workbook used to create these forms.
A balance sheet lists debts and assets. Click the link above to download.
If you live within your means, this information may not be essential, but it becomes critical with extended hospitalization or skilled nursing, either to budget, or to plan for Medicaid.
Click the link above to download.
It’s uncommon for estate or even financial planners to request a cash flow statement, but one is very helpful upon disability, when friends or family may struggle to manage your business for you.
Consider supplementing this form with the income tax withheld from Social Security, pension, or IRA distributions. Also, it’s helpful to know whether minimum required distributions from IRAs or other retirement plans are automatic or must be manually scheduled.