Financial Organisation: The Importance of Planning Ahead
Life is unpredictable. While we hope for only good things to happen in our future, the reality is that events that are the exact opposite of our hopes are just as likely to happen. No one wants to think about the possibility of becoming incapacitated or passing away, but the need to prepare for these life events is inevitable, especially when it comes to our financial affairs. While it can be difficult to contemplate these possibilities, it’s important to plan ahead and have conversations with people we trust while we are in good health, so that we are prepared for any unforeseen circumstances.
When it comes to financial organisation, there are two life events we need to understand the circumstances of and identify the needs around it – incapacitation and death.
Incapacitation refers to the state of being unable to make decisions or manage our affairs due to physical or mental health issues, such as a coma for example. In such a situation, our family will be left with the task of ‘guessing’ our preferences for type of care or how we would want our financial affairs to be handled, and it can be an extremely complicated affair. The situation is further complicated if we are single or living alone.
On the other hand, death is an inevitable part of life. While death may be the bridge into the next chapter for us beyond this world, it is no less a challenging affair for the living without proper planning. The process of settling our estate and the matter of inheritance can be a difficult and stressful task for our loved ones. By organising our financial affairs, we can make the process smoother and less challenging for our loved ones during an already emotional time, as well as mitigating potential family conflict.
The key step about financial organisation for both situations is to ensure we have spoken with a trusted person about our finances. This could be a family member, friend, or a financial advisor. By sharing information about our monies, debts, and assets, we can ensure that someone is prepared to take over in case we are unable to manage our finances on our own. This can help prevent confusion and frustration for loved ones who may be left to sort through our financial affairs without any guidance.
Once a trusted person is identified and has agreed to act on our behalf, we will then need to proceed to the next steps of creating a will or trust, setting up power of attorney documents, and making sure our beneficiaries are all updated. By taking these steps, we can help ensure that our wishes are carried out according to our values, and that our loved ones are provided for in the event we become incapacitated or pass away.
It’s also important to regularly review and update our financial affairs at different stages of life. Life changes and so do our life goals, and our financial situations need to adapt alongside them. By regularly checking in on our accounts and making sure our plans are updated, we can ensure that our financial affairs are always in order.
To summarise, financial organisation is crucial in preparing for the possibility of incapacitation or death. By speaking with someone we trust, creating necessary documents, and regularly reviewing our finances, we can help ensure that our loved ones are prepared to handle our affairs in the event of an emergency and provide peace of mind for ourselves and our loved ones.
Copyright Statement This article and video is original content created by Xiao En website, to whom the copyright belongs to. The content should not be reproduced without permission, otherwise it will be regarded as infringement. Xiao En reserves the right to pursue legal action against unauthorised use of the content.