When planning for their goals, many persons will often make decisions in an overly optimistic way, believing that all things will move smoothly to take them towards their desired results. Most people prefer not to think about the negative occurrences that could derail their dreams.

It’s good to visualise a bright future for yourself, where your positive attitude and persevering actions will help you to accomplish all your goals. However, it’s financially smart to prepare for any unwanted situations that are different from what you envision for your life.

Life has no guarantees
One of the unpleasant eventualities for which you need to make financial preparations is the possibility that you might not live long enough to actualise your dreams or enjoy the fruits of your hard labour. Death is certain, but none of us knows the exact date that it will visit our doors.

While it’s understandable that the subject of your demise would not top your list of goal priorities, it is one facet of financial planning that must take precedence. If you have persons that depend on you for their survival, you need to make adequate preparations to protect them when you die.

The process of making plans to distribute your assets to your survivors upon your passing is called estate planning. You need to make decisions while you still alive that will allow your property to be smoothly transferred to your beneficiaries when you are no longer around.

Produce your ‘passing plan’
Like any other goal, you need to be clear about what you want to achieve with your ‘passing plan’ and then determine the best course of action that will help you accomplish your objectives. In other words, what would you want to happen to your property and dependents when you’re gone?

The first step is to think about all of your assets, such as money in financial institutions, vehicles, real estate, jewelry or stock investments. Make a list of your items of worth, and also include any personal effects that may have sentimental value to your family and friends.

Then consider all the persons who may be dependent on you, or those loved ones who would be negatively affected by your passing. How would you want your belongings to be shared up among them? Make a note of your wishes beside each item or asset on your list.

Designate before death
It’s important to make proper preparations to pass on your property; if you die without a plan in place, the government and law courts will make the decisions on your behalf. This can take several years to complete, and may result in your assets going to people whom you did not wish to benefit.

Passing on assets after your death can also be costly. Some property such as real estate or stocks will attract government fees in order to complete the transfer to the new owners. Without a well-designed plan in place, you could end up forfeiting large portions of your wealth to the tax coffers.

One way to prevent the unwanted disposal of assets or the loss of property value is to have your beneficiaries become joint owners of your assets. You could add family members to your bank accounts or real estate holdings, so that they would become the new owners upon your death.

Protect your property now
While having persons with joint ownership would take care of some of your after-death hassles, it could present even more problems while you are still alive. Once you allow others to jointly own your property, they could potentially misuse your funds or assets to your detriment.

You have to be realistic about your personal situation before you decide to assign joint holders. If you have family members who can’t be trusted or have a reputation of making unwise financial choices, then you may not want to take the risk of them having access to your assets.

For any property which needs to be transferred upon your death, you should make a will that outlines your wishes. This document must be written and dated, indicate the name of an executor who will carry out your directives, and be signed by two witnesses who are not beneficiaries.

Consult on complex issues
If you have few possessions and your family situation is uncomplicated, then you can establish a basic estate plan by setting up joint ownership of assets and writing a simple will. This can give you peace of mind, knowing that you have properly prepared for your passing.

However, if your situation is not straightforward, you may have to make more detailed plans. For example, if you have young dependents with no reliable family member to take charge, have adult children with special needs, or own a business, you may require expert help to make decisions.

If would be advisable to consult with an attorney who is knowledgeable about estate law to ensure that your wishes can be executed efficiently when you die. Next week, we will continue to look at strategies to help you design an effective plan for your passing.

Copyright © 2013 Cherryl Hanson Simpson. No reproduction without written consent.

Originally published in The Daily Observer, October 24, 2013

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Cherryl is a money coach and business mentor, and founder of Financially S.M.A.R.T. Services. See more of her work at www.entrepreneursinjamaica.com and www.financiallysmart.org. Contact Cherryl