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Sunday, September 24, 2023

The importance of being prepared

Beyond having a financial goal and a well-balanced portfolio, it’s also important to make sure you don’t have gaps in your overall financial plan. When I work with clients, one gap I often see is in their estate planning. Having an estate plan is such a crucial component of managing your investments, but I’ve found that clients are often reluctant to address it. I can understand why—it can be challenging and uncomfortable to think about your death. While it’s easy to push estate planning out of your mind when you’re still young, in my experience it’s better to begin planning early. This way, you can set your loved ones up for success when the time comes.

One night in early July, as my wife and I were preparing for bed, we had unexpected visitors. Police officers showed up on my doorstep to inform me that my elderly aunt had passed away in her sleep. As the executor of her estate, I knew what my aunt’s wishes were and I’d thought I was prepared for this moment. But I soon realized just how much there was to do.

I was on the phone for what felt like hours that night, speaking with the police, contacting a funeral home, reaching out to members of my family to inform them of what happened. In the days that followed, I made decisions about the funeral home, visited the local courthouse, dealt with utilities and spoke with creditors. Needless to say, it was much more involved than I’d anticipated. After having experienced this firsthand, I now have a different understanding of this process. I was so grateful to all who were kind enough to help me, and I’d like to help you too.

Ensure your wishes are met

Before my aunt passed away, we met several times to discuss her estate and she was very clear about her final wishes. The detail of these conversations greatly helped me later, when I was able to execute her estate the way I knew she wanted. When you have these conversations with loved ones, it’s important to ensure all your details can also be referenced clearly and easily.

It’s also a good idea to draft a will or similar legal document. Without a will in place after your death, your assets could pass through your state’s probate process, a lengthy procedure that sometimes fails to divide your assets per your exact wishes. You also might want to consider a living will. While it might be unpleasant to think about, there may be a time when you won’t be able to make these decisions on your own. A living will, which concerns important medical care decisions, can empower a loved one to make these decisions on your behalf.

It’s worth taking the time sooner rather than later to outline in detail what you’d like to happen. What are your final wishes? Unless they’re really discussed, it can be tough for your loved ones to understand and act on them. These preparations don’t have to be complicated or expensive, but when the unexpected happens, you need to have these documents in place.

Find the right advocate for you

One thing I like to determine early on in my conversations with clients is whether they have an agent or a power of attorney (POA). Agents and POAs have access to your financial assets and can use your funds on your behalf (for example, to pay for your medical expenses). If you decide to name an agent or a POA, it’s important to choose someone you trust. While the idea of giving a friend or loved one a full picture of your investments might make you a little nervous, your agent or POA has an important mission: to ensure that whatever happens is in line with what you want.

When the unexpected happens, it can be debilitating for loved ones. It may be too stressful for them to make estate decisions on their own. This is why it may also be worth seeking out the appropriate estate planning professional, who can remain objective as they guide you and your family. If you do decide to go this route, I’d encourage you to interview multiple attorneys to make sure you find someone you and your family feel comfortable working with. Build a rapport with them so it’s easier to have difficult conversations when you’re ready.

Why this matters now

Humans can be very good at procrastination. Estate planning is one of those to-do items that’s often pushed until later. This can be extremely costly, but it doesn’t have to be.

While it can be scary to think about, it’s worth it to put in the time and effort to address those matters now. In doing so, you can ensure that your loved ones are supported and you can empower others to support you too. Don’t rush through your plan—really think it through. And above all else, remember that you don’t have to face this alone.

See how Vanguard Personal Advisor Services can help


All investing is subject to risk, including the possible loss of the money you invest.

Advice services are provided by Vanguard Advisers, Inc., a registered investment advisor, or by Vanguard National Trust Company, a federally chartered, limited-purpose trust company.

The services provided to clients who elect to receive ongoing advice will vary based upon the amount of assets in a portfolio. Please review Form CRS and the Vanguard Personal Advisor Services Brochure for important details about the service, including its asset-based service levels and fee breakpoints.

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