Must-Have Documents
Chances are, you’re aware of a few of life’s must-have documents. You know you should have them, but for some reason or another, you’ve been postponing actually getting them.
Identifying your 10 must-have documents
According to Daily Finance, there are 10 must-have documents every family should have in place. Check out this list to learn which ones you have – and which you need to obtain. Having all 10 in place will help you sleep better at night.
1. A living will and health care proxy
These are two different forms, but they serve similar purposes. A living will expresses your preferences about treatments in case you are unable to communicate with your family and doctors. For example, if you’d rather not be kept alive by extraordinary means for more than a month, you can make those wishes known. Or, if you would like to have your life prolonged by any means available, for as long as possible, no matter what your condition, you can make that clear, too.
2. A will
Another must-have document is a will. A will is important unless you would like the state to decide what happens to your possessions. It’s preferable to consult a professional about your situation, even if you feel your situation is fairly straightforward. A lawyer can ensure that all of your wishes are addressed and that your will conforms with your state’s laws.
3. Durable Power of Attorney
This authorizes someone you trust to make financial and legal decisions in case you can’t make them yourself. This can be critical, even if you’re temporarily unconscious temporarily (say for a few weeks) because of a post-surgery complication. You may need someone to close on a home you’re selling or deal with a credit card company. The paperwork for this must-have document is minimal, and the potential value of having this in place is significant.
4. Estate plan
It’s not just the rich who need estate plans – anyone who has assets that they wish to pass on to their heirs will need one. It’s a matter of figuring out how to structure and arrange those assets so that you can leave your loved ones as much as possible, on your own terms.
5. Homeowner’s or renter’s insurance
You probably know that you need homeowner’s insurance if you own a home. But you may not realize that you can – and should – get insurance even if you rent. If your apartment is flooded, for example, your landlord isn’t likely to reimburse you for damaged books and musical instruments.
Even if you have insurance on your home, don’t be complacent. Check it every year or two. Is the amount you’re covered for still reasonable? If the cost of materials has soared, it may cost a lot more than you and your insurer originally expected to rebuild your home if necessary. Also, if you’ve made major home improvements, you may want to increase your coverage.
6. Brokerage statements
We include brokerage statements here because most are invested in the stock market to some degree. While you don’t need to have your entire net worth tied up in stocks, stocks are a decent way to build long-term wealth.
7. Credit reports
With Americans using credit cards more than ever, it‘s critical to maintain a good credit history. It may surprise you that a credit report is counted among your must-have documents.
This must-have serves as a reminder: credit reports can sometimes contain errors – and it’s within your power to get them fixed. If you haven’t made sure your credit report is accurate, you may lose out on the best available interest rate on a mortgage or car loan, a mistake which could cost you thousands of dollars. Poor credit scores can even cost you potential job offers – some employers are now checking applicants’ credit histories.
8. A financial manifesto
If you’re in a committed relationship, you need to have a financial heart-to-heart with your partner. Too many couples avoid these conversations and end up in trouble.
Get your plan on paper. The next time you feel a money tiff coming on, remind yourselves that you really are a great team by reviewing those life goals that you set together.
9. Retirement plan
When it comes to retirement, too many cross their fingers and hope for the best. But most of us still have a chance at securing our financial future if we plan and take action now.
If you are self-employed or small business owner, consider a self-directed Solo 401k with checkbook control. Considered as the ultimate retirement account for self-employed, the Solo 401k is the best option to maximize your tax deductions and obtain total control over your retirement account.
If you are an employee and receive W2 wages, your option might be self-directed IRA, which gives the ability to invest in non-traditional investments such are real estate, notes, tax-liens and much more to achieve true diversification. For experienced investors who wish to have total control over their retirement account, a self directed IRA LLC, also known as Checkbook IRA, can be an option.
10. A list of things you want to do in life
This last of the must-have documents may seem corny, but if you fail to pay attention to what you’d really like to do in life, you may find yourself with regrets. This list is actually more fun to compile, and only you can do it. Think about the accomplishments you’d like to check off your bucket list, and start working on it right away.
Compiling your documents
Sense Financial’s team is equipped to help you with your list. Over the years, we’ve identified the best service providers and would be happy to assist you. Please contact us today for a free, no-obligation consultation at 949-228-9394.