Compile a list of uncomfortable topics, and no doubt health and money would be near the top of the list. Combine the two and it’s clear why so many people fail to make plans to deal with incapacity. After all, who wants to spend time thinking about the difficult realities of old age or debilitating illness, particularly as it relates to finances?
It's painful for people to confront the limits of their own mortality. For the most part, we recoil at the thought of ceding control to the debilitating forces of old age, so we choose not to plan for it. But as the oldest members of the outsized Baby Boomer generation begin turning 70 years old, a large percentage of the population will now be faced with these issues.
At some point, many of us will find ourselves unable or unfit to make important calls about finances and medical care. Avoiding the topic simply means we’re unprepared for outcomes that, intellectually, we know are quite likely.
Facing the Fear of Planning
Preparing for incapacity has at its core two critical elements:
•Identifying people you can trust to make financial and medical decisions on your behalf, should you be unable to make them for yourself.
•Having the right documents in place that provide the necessary legal authority for your chosen representatives to carry out your wishes.
Once you’ve identified the key individuals you trust to manage your affairs, have a full and frank discussion with them to ensure they’re clear on your wishes. It’s also important to share this information with key family members. In many cases, family members are hurt or surprised by the choice of a key individual – particularly if they find out well after the fact. Sharing this information early can help avoid potential conflicts arising at a time when you’re ill-equipped to deal with them.
While each estate plan will be different, there are a number of components you should consider in order to ensure you’re adequately prepared:
•A standard will (including a testamentary trust where appropriate)
•A nomination for your superannuation fund
•An enduring power of attorney
•An enduring guardian
You should also ensure someone trusted knows where all your vital documentation is located so that it's easily accessible when required. That means more than just the documents outlined above – consider also making available things like insurance policies, bank account information and so on.
How can Morgan Stanley help?
Morgan Stanley employs a number of financial planners who specialise in providing estate planning services. Your dedicated Morgan Stanley financial planner can help you identify and prepare the documentation needed to give you confidence that your affairs will be well-managed if you’re not able to manage them yourself. You should also make your financial planner aware of the people you have entrusted to act on your behalf – knowing the right people to contact can greatly simplify the process if time is a factor. The support of your financial planner will also be of great help to your delegates if they are ever called upon to act on your behalf.
Protecting yourself and family from an incapacitating event can be a complex process. Your Morgan Stanley financial planner can explain the steps you should take while you’re still healthy and help ensure your affairs are properly managed in the event of incapacity.
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