6 Documents Everyone Should Have to Protect Their Finances

6 Documents Everyone Should Have to Protect Their Finances

financially fearlessWish you had a financial game plan tailored to your priorities, lifestyle, hopes and dreams? You can start with this sneak peek excerpt from “Financially Fearless: The LearnVest Program for Taking Control of Your Money,” the new book from LearnVest C.E.O. and founder Alexa von Tobel, CFP®. Available to order today, so you can be one of the very first readers!

Today's excerpt focuses on the key financial documents that everyone should have—making it the perfect latest installment in our 12 Days of LearnVest series. So today's challenge is twofold: It's time to take stock of the critical financial paperwork that you don't yet have—and arrange to get it as soon as you can.

You thought insurance was the least fun topic we could discuss ... but now we break out the list of documents you need! Woo-hoo!

Sorry, we have to. You can’t call yourself fully protected if you don’t have your critical paperwork done. Below are the six things you need to have under control.


Get started with a free financial assessment.

1. Beneficiary Forms

A beneficiary form lets you indicate whom you would like money to be transferred to upon your death—even if you don’t have a will. If you have any of the following account types, you’ve likely filled this out already: a 401(k) or retirement accounts through work, life insurance policies, IRAs, annuity accounts, and 529 college savings accounts. If you’re married, it’s common to list your spouse as your beneficiary (and if you want to do otherwise, you may be required to have your spouse sign off on that). This saves you money because it keeps your assets out of probate court.

What to do: Ask for a copy of your beneficiary form for each account and make sure it’s properly filled out. Save your own copy.

2. TOD/POD Instruction

TOD (transfer on death) and POD (payable on death) are other ways you can transfer assets to a beneficiary without a will. TODs are typically used for any brokerage accounts that do not have a beneficiary form in place, and PODs are for bank accounts (like your checking and savings). Having these forms allows you to avoid probate even if your financial situation does not yet require a full-blown will or trust.

What to do: Make sure all accounts that do not have a beneficiary form have a TOD or POD instruction in place.

RELATED: 3 Money Lessons That My Dad Taught Me ... in Death

3. Living Will

A living will lets you communicate your medical preferences to your loved ones. This is awful to think about, but it helps simplify any tough decisions your family and friends may have to make if something happens to you. A living will includes naming your health-care proxy—the person responsible for carrying out your living will. We recommend choosing a loved one or even an unbiased adviser who can remain neutral.

What to do: Staying in control of your health-care decisions is a powerful tool, so make sure you have an up-to-date living will.

RELATED: To Have and to Hold and ... to Be My Healthcare Proxy?

4. Power of Attorney

This document gives someone else the right to make decisions for you (if you’re no longer able to). It can cover both legal affairs and health-care decisions.

What to do: A power of attorney is recommended once you’re married, but even if you’re single, it’s something to consider if you may be in a situation where someone will have to act on your behalf.

RELATED: How Long Should I Keep My Financial Documents?

5. Last Will and Testament

A will guides the court in making decisions for you after your death and helps ensure that your wishes come to fruition. It’s a critical tool for parents, as it assigns legal guardianship of your minor children.

What to do: If you own a home or have children, you will need a proper will. If you’re not yet in that position, your beneficiary forms will work for now!

RELATED: Wills and Trusts 101

6. Trust Documents

A trust is like a will, in that it outlines what you want to happen to your assets upon your death. Unlike a will, assets in a trust do not go through probate (which means the court cannot interfere with your decisions). It allows you total control over the passing of your assets to heirs.

What to do: Trusts are recommended when you have children and/or a complex financial situation (e.g., children from multiple marriages).

RELATED: Is a Trust Right for You?

Now you know what insurance you may need to buy, what policies you need to update, and what docs you need securely stored in your safe-deposit box. You should feel fantastic about checking off these to-dos. Nothing feels as good as knowing you and your family are protected from life in all its chaos.

Too often, insurance and estate planning are one of those “Oh, I should probably get around to doing that” things that linger in the back of your mind, quietly nagging you for years—decades, even. And we finally just got through them! It’s the best thing you could have done with your time. Let’s check off those boxes on your “financial plan” checklist. Connect with one of our LearnVest Program experts if you need help following through.

Reprinted from the book “Financially Fearless: The LearnVest Program for Taking Control of Your Money,” by Alexa von Tobel, CFP®. Copyright 2013 by Alexa von Tobel. Published by Crown Business, an imprint of the Crown Publishing Group, a division of Random House LLC, a Penguin Random House Company.

LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc. that provides financial plans for its clients. Information shown is for illustrative purposes only and is not intended as investment advice. Please consult a financial adviser for advice specific to your financial situation. LearnVest Planning Services and any third parties listed in this message are separate and unaffiliated and are not responsible for each other’s products, services or policies.


Financial planning made simple.

Get your free financial assessment.

Related Tags

Get the latest in your inbox.

Subscription failed!

You're Now Subscribed!