Ep # 64: The Concept Of The Final Financial Plan

Benjamin Haas |
  • What is the Final Financial Plan? - 1:13
  • The role of the executor - 3:32
  • 1st key thing contained in the document: financial accounts - 5:30
  • 2nd key thing - contact information for those important in your financial life - 6:19
  • 3rd key thing: keep the document updated - 9:56
  • It is not a legally binding document, but a love letter to family or friends - 14:53
  • Two purposes of the document - 17:37


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Full Transcript:

Benjamin Haas  00:03

Hi everyone and welcome to A/B Conversations where we will help you CFP your way out of it. A podcast where you get into the minds of a couple Certified Financial Planners on how we think and feel about everyday financial planning questions and what should really matter most to you. A healthier financial life starts...now!


Adam Werner  00:26

Hey, Ben. How are you doing? Welcome back to the podcast.


Benjamin Haas  00:32

Doing well. How are you?


Adam Werner  00:35

Doing alright.


Benjamin Haas  00:36



Adam Werner  00:37

For those listening at home, this was the first snow day of 2022.


Benjamin Haas  00:44

Yeah, yeah. Which brings out all of my worst emotions, quite frankly. Not a snow guy. Don't like having to shovel it. Don't hate the freezing cold but I tell you what it has given us like this great, great appreciation for our wood stove at home because it does give that very warm and cozy feel. So see, I spun that into a positive.


Adam Werner  01:08

Good for you. That's your optimism at work.


Benjamin Haas  01:12

That's right.


Adam Werner  01:13

So today, hard pivot right to the topic. Today we're going to share a relatively newer thought on our end or concept and that is this concept of the final financial plan. Right, we are obviously enormous proponents of financial planning. It's one we're in the business of doing but at a certain point, working with people leading up to retirement, getting to retirement, and then progressing through retirement. At a certain point, the thought needs to transition to estate legacy. What is going to happen when I am gone and I think we have an approach that while it's not a legal document like a will, it is essentially a roadmap for those that are left to help settle that estate - your executor, trustees, people like that.


Benjamin Haas  02:16

Yeah, which is why this isn't original. I mean, I think to a certain degree, we know certain people that do this themselves. Jot down some notes, I love you letter to the family. There are programs out there, I think our version of this really came from recognizing that there are some online programs that people could really get plugged into. The idea is really what you said, if you've, and I'm sure many people can relate to this and hopefully it's been a good experience, not a bad one. But when you unfortunately are in that situation that a loved one passed away and you've been given some of the responsibility to help settle that estate. It's great if people do have those legal documents, the will, the power of attorney, healthcare directive, all the things that leading up to end of life and then right at end of life, give some instruction but let's dive into some of the details of this. Does that really help people figure out where certain things were kept or how to access certain accounts? Or like, let's maybe start here, let me throw it to you. We did a podcast last year on the roles within estate planning. What is the role of an executor or an executrix? Like, what is that role?


Adam Werner  03:31

Wow, so their role is essentially to transact, or at least to help put into place everything that was established in the will and that's assuming there's a will. We are assuming for anybody that works with us, we are strongly encouraging everyone to have a will. We believe everyone needs to have that rather than have it default to the state rules for who you leave money, naming somebody to act on your behalf after your pass, to name that executor is a whole other mess. So let's just assume you have a will, your name an executor, their job is essentially to execute (executor) those wishes that are named in the will. If it's a specific piece of property like family heirloom, a ring, for example, that needs to go to a specific person, their job is to make that happen.


Benjamin Haas  04:26

And that's the end result. Right? To get to that point. It may mean that that person has to close accounts. Has to go to the utility company and shut off that utility before they can sell the house and move it where it's set to go. Finding access passwords. All of this stuff is not usually something that is left in a clean, neat, tidy, very easy to find spot for that family member, that loved one to execute on. So let's get into the idea of the final financial plan, just like your financial plan is through your lifetime, is to basically say, here are all the things I would want my loved ones to know and by the way, here's the roadmap. I think we've identified maybe like three key points of why this document should be there and what it would entail. Maybe let's just go through it.


Adam Werner  05:30

Yeah, it really is, hopefully, an organized list of the important things, like you said, the important things, the important people, so maybe I'll start there. If there are investment accounts, if there are bank accounts, whatever that insurance


Benjamin Haas  05:48

Yeah, life insurance. Workplace benefits.


Adam Werner  05:52

Yeah. Yeah. Just to even give that executor the information that they can now follow up on and start the process.


Benjamin Haas  06:05

Do people even know what a Rolodex is anymore? Is that a thing? Do we call it that?


Adam Werner  06:09

For our clients, yes, I think everybody would understand what a Rolodex was. If I said that to my kids. They would think I made up a word.


Benjamin Haas  06:17

Yeah, right.


Adam Werner  06:19

But yeah, that's that. Yes, that is essentially part of the job of this final financial plan is to list those important people and for anybody that we work with, we are one of those important people on that list, we would need to be notified just like the bank would need to be notified to essentially, I don't know if freeze is the right word, but once somebody passes away, there are steps that need to be taken from a financial standpoint. It's your insurance agents name, your financial advisor, the bank or representative at the bank. All of those people, your accountant if I didn't say that. Just to number one, notify those people of your passing and at least give them that contact information. So not having to dig through and I guess that's the point of a lot of this is that, hopefully, it's in one spot, a consolidated point that the executor can access so that they're not having to dig through piles of papers, filing cabinets, years of records.  What is actually current and what may be old banks, old investment providers that are no longer active. You can easily send somebody on a wild goose chase without some organization on the front end.


Benjamin Haas  07:44

Yeah, so I think that's the second key point. It's not just answering that question right off the front. Who do I even need to contact? Where do I begin? You know, let's contact these people because they're going to know what's current, we know what's going on in the client's financial life, right? More often than not, more than the person that's the executor, the executrix of the estate, but then that second part is, again, let this be a roadmap of sorts. As much as possible, get all of those accounts listed into one spot.  It's the location of the will, by the way, you need the original. So where was that? Is it in the safe deposit box? Is it at the bank's deposit box? Is a with an estate attorney? You need to find the original. So this document should list here where all the important legal documents are. Deeds to the house, car titles, healthcare documents. All of these may be needed to be referenced along with the detail the state distribution lists and some of that is going to mean financial accounts should have beneficiaries listed on them. The will should dictate certain things if they are physical pieces of property or tangible items, like you mentioned. Let's get all of where those things can be found listed in a document like this, so it is just a checklist of sorts.


Adam Werner  09:03

Yeah, and maybe this is where the title, the final financial plan may be a little misleading knowing that at over time, those items, their location, the accounts that may also change and be updated over time, which just means like any other financial plan that we do, it's an update that would need to occur on this document, too.


Benjamin Haas  09:28

Yeah, I guess that's a really important point that I didn't think about. When we call it final. Well, just because I think, you know, we asked the question all the time. Do you have a will and people go, yeah, that's fine, taking care of. Well, what's the follow up question? When's the last time you updated it? Oh right, when the kids were born.


Adam Werner  09:54

When I went to Vietnam.


Benjamin Haas  09:56

So the point is that is the final one. Whenever you pass away, hopefully within the last year or two years that has been updated so that you've had a clear communication with if it's not a spouse. It's good to have for each other but more often than not, I'm thinking that this process is really important for when the second person is passing away or when somebody who's already single, widowed, widower; it's going to have either a child, somebody's not as intimate with the financial life that you have, is going to have to pick this up. Right, so this is the final document. This is where you can find it and it'll tell you where everything else is to be found.


Adam Werner  10:38

Yes, yeah, I think we've often talked about and we had a client experience couple years ago, where the person that passed away was incredibly organized. Was incredibly efficient with and clear with where things were, the documentation, all the different accounts, everything was in one spot. With all of that being said, the estate settlement process is always still a bit of a slog for those that are left to execute because it is a procedural process. There's paperwork involved, you need to contact Social Security, you need to get death certificates, and they need to all be sent to the right spot. You need to be appointed by the court, it can be a very burdensome process for that person that is left to execute that. So making that process, even if it's 1% simpler. I'm alluding to maybe a previous conversation but yet anything to help grease the wheels for that process is ideal. Again, just to eliminate some of the time and effort that can get put in on the back end once somebody passes.


Benjamin Haas  11:54

Yeah, because I think some of the things that will need to get handled are very, like you said, small, detail-oriented things that even we in our own financial life would take for granted. Right? I know the passwords to my accounts. I jot them down; would anyone know where to find them besides me? No, would Desiree know all of these things are? Where I keep them? Maybe not.


Adam Werner  12:20

I'm in the same boat.


Benjamin Haas  12:21

She'd probably have a better guess at some of my passwords. Maybe I shouldn't be putting that out there but it is to think that detail oriented that, okay, we're not just dealing with here was a financial account, I'll let the institution know and they're just going to send money to the beneficiaries as they should. That may sound burdensome, filling out that that quick paperwork, what's more burdensome, there were eight different bills that are auto paid by a bank account and now I need to figure out how to contact these institutions and stop auto pays because I'm closing that account. Now I need online access to all these things, like you can quickly get yourself into this anxiety filled. Where am I going to get this information? So wouldn't it be so much better if you could just have a consolidated list or even just, this is like, whisper down the alley or a treasure hunt, right? You open up one clue, this is where you're going to find my final financial plan. They're going to turn to page six of this thing, and it's going to say, here's where you can find all my passwords, and it's going to lead somebody, hopefully, to your point more efficiently to the information that they need.


Adam Werner  13:34



Benjamin Haas  13:36

Because it's, uh, go ahead.


Adam Werner  13:39

No, no, no.


Benjamin Haas  13:41

I'm just looking at some of my last notes. It's not just the auto-pay. Again, I like the idea of it being instructions on where to find other things, you know, there may be heirlooms and keepsakes and things that you want to give some feedback to somebody on.


Adam Werner  14:03

Sorry. What do you mean by feedback? Just that direction. So using an example of a family heirloom, where's it located?


Benjamin Haas  14:13

Where's it located and maybe to a certain extent, you don't want people fighting over this stuff. So if it would have been my intent, the will. The problem with the will is sometimes is that it's meant to be a little bit of a broader. I think attorneys like some flexibility, just my interpretation. You just acquired on your last birthday this cool, you know, signed baseball by somebody. Going through your list of valuables every now and then in thinking about well, little grandson Johnny's really into baseball right now, maybe he would like that.


Adam Werner  14:53

Yeah, and I guess that's where the ultimate caveat being here that this is not a legally binding document, it truly is, as you said, a love letter to your family or to your friends that are left behind to help execute this process and just maybe it is laying out some of those wishes that may not be huge financial assets that should be listed in a will. To your point they are, we often hear this, right, it's opening up when somebody passes away. Maybe it is the second spouse that oftentimes the family goes into the house and everybody can kind of pick and choose what is valuable to them, what they would like to keep as a keepsake. Part of this process is if there are those specific bequeaths, like you just said, something that is maybe newly acquired, that it still goes where you want it to go and it doesn't get left up to interpretation.


Benjamin Haas  15:51

I think the same thing with final arrangements and this is such a morbid conversation and I get that, but I know we say it in other conversations that we have to have. If you do it once, hopefully you don't have to do it again. If God forbid something happened to my parents tomorrow, do I know what they want their funeral arrangements to really look like? I don't. Maybe my sister or my brother do, I'm guessing maybe they don't. So again, it's just an opportunity to say some things that would be important to you and let this be the method of putting that down or thinking about those questions so that it doesn't just get to a point where, again, the end has come and now people are guessing, right? Is there anything worse than that feeling of like, I don't think that mom and dad would have wanted this? I think that Aunt Susie would have wanted this but I don't really know. Wouldn't it be so much better to just have it in paper that, gee, I really love How Great Thou Art and I hope that, you know, I would love that to be the hymn played at my funeral. Pick another example. Whatever.


Adam Werner  17:01

Yeah, it truly is putting some time and effort on the front end while you are living to help alleviate some of that anxiety and stress on some of the administrative fallout, while oftentimes the person that is named executor is somebody that is close to the person that has passed and is dealing with that grief and that fallout as well. At the same time, they're trying to execute the administrative side of somebody's life and that's where oftentimes it can be very overwhelming to people.


Benjamin Haas  17:37

So then, if I could kind of wrap it up. This really has two different purposes, right to the people that we're working with that are kind of in that phase of life, we can walk you through this process if you just want to see things that we think would be helpful for the next generation. On the other end, if you're pretty sure you know that you're going to be responsible for someone you really care about having to go through this, then let this be the roadmap to having a conversation with them on - are you willing to jot down some of these things for me? Again, it's not to create awkward situations and I know relationships are different and some things you don't know, some things to do. But the fact of the matter is, if you're being asked to do this job, this is what you're going to have to do. Having some sort of coaching or instruction on that really behooves everybody on the front end.


Adam Werner  18:30

Yes. That's a great point. I'm glad you brought that up. I was not thinking of it through that lens but yes, for those that are going to be tasked with helping settle someone's estate. Yeah, you'd essentially be doing yourself a favor in the future by having a conversation or at least getting some things documented well in advance.


Benjamin Haas  18:54

Again, not an uplifting podcast.


Adam Werner  19:01

No, but it is something that we can help with that is it is a concept that we've again, is not necessarily original to us but is something that we can help implement. It really is just for us, it's all about organization, we can help craft that document and have it be memorialized.


Benjamin Haas  19:20

Yeah, and I think you said it in the beginning but I'll make sure it's crystal clear. It's not as though this is something that needs to get notarized or becomes a legal document. Think of it really as that off the side of the table, love you letter that you would hope for somebody to find and make sure that they will find. That is just added instruction to what's going to need to happen. All right, as always sir, thank you for your guidance.


Adam Werner  19:49

Thank you.


Benjamin Haas  19:50

Have a great one.


Adam Werner  19:52

You too. Bye.


Benjamin Haas  20:04

Hey everyone, Adam and I really appreciate you tuning in. Please note that the opinions we voiced in the show are for general information only and are not intended to provide specific recommendations for any individual. To determine which strategies or investments may be most appropriate for you. Consult with your attorney, your accountant and financial advisor or tax advisor prior to making any decisions or investing. Thanks for listening!

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