Last week, my colleague in Oregon, Candice Aiston, published the following blog post and I as read it,I could really relate to Candice’s experience. You see, Candice and I both approach estate planning in similar styles–counseling based, compassionate planning that puts the needs of our clients and their family first. The great thing that I’ve experienced along the way is that if I really take the time to get to know my clients and their families and work with them to design a plan that truly meets their needs and goals, I end up learning a lot myself in the process. And so, with Candice’s permission, I wanted to share her article with my readers:

Things My Clients Taught Me

By Candice Aiston

Every time I get through a client’s estate planning process, I leave having learned something new. I learn what’s important to them and I learn about the characteristics they have that make them so successful in life. Most families that plan with me record a message to their children, and as they talk to their kids, I gain so much insight about what is important to these families. The families are all different when it comes to wealth, religion, political stance, occupations, and interests/hobbies. But they all have a few different things in common that I’ve noticed over the past few years. The characteristics are apparent throughout our entire planning process. Here are a few:

1. It’s all about priorities.

My clients are all very successful, especially in their family lives. I think this is largely due to the fact that they all have their priorities in the right order. At our first meeting, I hear my clients talk about their families. They tell me how they met their partners and they tell me about their kids. Sometimes the meeting is very emotionally charged, because we face worst-case scenarios and talk about their worst fears. They are there because taking care of their family is a priority, even if they were no longer here. Most of them feel that they’ve put off the planning for too long, and that it’s time to finally get it done. The best story I have heard about priorities came from a colleague of mine, whose clients (parents of young children) decided to use their vacation savings to pay for their estate plan. They decided that the planning was so important that a vacation could wait a little longer. (I have to admit, that would be a tough one for me. Luckily, many attorneys out there have various payment plans available.) All of my clients have made it a priority that you take care of your family first. Everything else comes after that.

2. Plan for the worst, expect the best.

Many people put off important things like estate planning, retirement planning, financial planning, and family budgeting because it’s really tough to face these issues. It’s difficult to face worst-case scenarios in your own mind, let alone discuss them openly with your family. It’s even more of a task to find a professional and set up that first appointment. Sure, everyone is busy, but there’s an additional psychological barrier that makes parents want to fly by the seat of their pants when it comes to this stuff. We seem to think that if we don’t think about death and money that the bad things won’t happen. It is very common for people to be superstitious about estate planning in particular. The idea is that if we acknowledge death and make plans for it, then we’ve admitted that the worst is possible. As long as we ignore it, it won’t happen. The truth is that death weighs heavily on all of our minds and actually holds us back from truly being able to expect the best. Once we have gotten through the process of planning for the worst, that weight is lifted and we can focus on the other important things in our lives.

3. Do the best you can for the ones you love.

The clients I have don’t take information for granted. We all have heard people say, “I need a will,” or, “I need to get something in place.” One thing all of my clients have in common is that they came to the first meeting to learn. They didn’t come to the meeting to tell me what they needed; they came to learn what their situation looks like, and to learn about how they can do the best planning to care for their families. They had questions. They wanted all the facts on the table so that they could make decisions that would work best for their families. It’s not about checking something off of your “to do” list or doing something that everyone says you should do; it’s about doing the best you can for the ones you love.

4. Just do it.

No, I didn’t just throw this one in there because so many of my clients work for/with Nike. All of my clients are pretty good at just doing it. They are all able to weigh pros and cons quickly and get things done. Most of my clients are extremely busy people. If they’re anything like me, they’ve probably had to learn to quickly weigh the facts and make important decisions, because they need to get on with their lives! If they know they need the planning, and they feel that they like me and trust me, the decision is a quick one. (Without those factors in place, no one should make a decision to move forward. If your meeting with a professional leaves you feeling more confused than ever, or if you get a gut feeling that you should leave, then do it! You should only work with someone who makes you feel comfortable and confident. No professional is suited to work with everyone.)

5. Find a way to make it work.

You may be surprised to know that many of my clients weren’t able to just write me a check for the full cost of their planning services. Once they learned how badly they needed the planning, they did what they needed to do to make it work, including asking me if there were payment plans available. Like most things in life, once you’ve decided to make something work, there’s little that can deter you. If you feel that you can’t afford the full cost of services up front, ask your attorney about a payment plan.

It’s hard to know how to conclude this post. I’m sure I have a lot more to learn from my clients over time. Maybe they should charge me a fee for all of this wisdom that they bestow upon me.

I came across a very touching story this morning on CNN.com: If I die, Who Will Teach My Daughters?

When a young author is diagnosed with a rare form of cancer, he wonders who is going to teach various life lessons to his young daughters as they grow older.

Feiler came up with a extraordinary answer. He would put together a group of men and call them his council of dads. Six men from different stages of Feiler’s life who could be Feiler’s voice, and could teach his girls the life lessons he might not be there to teach.

The article is well worth a read and includes a 5-step outline of how to form your own council of moms or dads.

For related ideas on the subject, check out my prior post on Randy Pausch’s Last Lecture.

Details of Michael Jackson’s Family Trust were leaked to the media recently. My take? Michael Jackson would have benefited from working with an estate planning lawyer that would have taken the time to educate Michael about available techniques to better protect his children. This is just another example of poor estate planning from a celebrity.

Under the terms of the trust, Michael Jackson’s children are in line to receive $33 million each. Michael’s mother, Katherine Jackson, will receive her share of the estate immediately, and any portion remaining when she passes, will be split between Prince, Paris and Blanket. The children will receive allowances until they are 21 and then at age 30, they’ll receive access to one-third of their trust fund, another third at age 35 and the remainder at age 40.

My guess is that if you have a trust, you may have the same exact distribution terms. How do I know this? Because it’s the “standard” that a majority of lawyers use when they don’t take the time to educate their clients about available options and protections that are available.

So what would I have done differently?

For starters, Michael should have been advised to use a living trust to hold his assets and ensure that all assets were properly titled. This could have kept his family out of the probate court. In short, probate generally costs too much, takes too long, and is totally public. It will be interesting to see how long the probate attorneys manage to keep things tied up in court and how much of the estate is eaten away by legal fees and related probate expenses.

Second, I would have taken the time to educate Michael about how he could have protected both Katherine and the children from a myriad of life risks, including catastrophic illness, lawsuits and creditors, divorce, and more.  Once Michael’s children receive their inheritances outright, the funds will be totally unprotected. What if they have creditor problems? It seems to be a pretty common occurrence for the rich and famous, and let’s face it, MJ didn’t exactly set a great example. If the children are sued or file for bankruptcy, the inheritance is going to be totally unprotected once it hits their bank accounts.

Instead, I would have suggested placing the funds in a lifetime asset protection trust. An asset protection trust can be set up in such a way that the children would still be able to receive allowances from the trust for their living expenses, but because the money is held in trust rather than owned by the children outright, it would be protected from lawsuits, creditors and other life risks.

What if one of the children receives their share outright and later gets divorced? There’s a good chance that part of the inheritance will be lost to the ex in the divorce proceeding? Is that really what Michael would have wanted? Most families I work with want to keep the inheritance within the bloodline.

If the trust had included asset protection, Michael could have had the peace of mind that his children would be well provided for, but also protected from life risks and that the assets could have continued to grow and accumulate for future generations.

Want to learn more? Then visit our website and download our new e-book, The 12 Most Common Threats to Your Estate and Your Family’s Future.

In case you missed the most recent issue, Jackie Bedard was honored to write a Financial Focus piece for the current issue of Cary Living magazine. To read the 4 Secrets Loving Parents Need to Know to Protect Their Kids, click on the image below.

*Note: Depending on your web browser, after opening the image, you may need to click on it again to magnify the image to read it.

This article was originally included in our email newsletter on May 13, 2010.  It may have been edited somewhat from the version that was originally emailed, so be sure to sign up so you get the newsletter hot off the press!

It’s finally here! Your son or daughter has finished with exams, sold a final round of textbooks, and is donning a cap and gown to walk across the stage to get that college degree. You should be very proud. After all, they’ve put in a lot of hard work and patience to get there, and you have put in a lot of hard work, patience, advice, and support as well.

But you know your job’s not over. Chances are, your kids will still need some help and advice after college. This is particularly true in the area of personal finance. Let’s face it: the real world looks a little different than the green grass and stone pillars of campus, with its dormitories and dining halls and credit hours and semesters. People can pick up a lot of bad financial habits during college and in the couple years that follow. Sometimes these habits cause mistakes that take years to fix.

To help avoid these mistakes, I’ve put together a few life lessons the commencement speaker might not have covered. Some are lessons I had already figured out by graduation. Some were passed to me later as advice. And, unfortunately, some have been learned the hard way. I hope they help you get the conversation started with your kids.

Lesson number 1: Your Words and Deeds Will Come Back to You
Ah, Facebook. Remember that rant about that rival college and their football team? Those pictures from that all-night party? (And the after-party?) Hopefully you’ve kept your nose clean on this one, because a recent careerbuilder.com survey reveals that 45 percent of employers use social networking sites to screen applicants. So before submitting your resume, take a look at your Facebook privacy settings and clean up anything you might be embarrassed to show a potential boss. You might even go a little goody-two-shoes and join a couple networks that responsible adults would be part of. You can find some more details here.

Lesson number 2: You Need a Job
As an adult, you will be expected to pay for things you may not be used to paying for: food, housing, transportation. These expenses will require some source of income. Note that your degree does not entitle you to an income–it might not even get you a job. But you need to find a way to cover basic expenses before enjoying any extras.

Here’s how you can afford some of those extras: Negotiate your salary. Here’s an article from the Washington Post to get you started. Google “negotiating salary” for hordes more. Do some research, and find out what a job pays for someone with your skills. Don’t take a job you know you will hate, just because it pays more. It will encourage you to spend more, which will keep you on track for a career you hate.

Lesson number 3: You Need a Budget
Your expenses need to be in-line with your income. For the sake of your wallet and your health, you shouldn’t eat out every night. You probably won’t be able to afford living arrangements as nice as the house you grew up in, right off the bat. And you need to consider a reliable, probably even used, car to start.

In addition to food, housing, and transportation, you will need insurance. Health insurance. Car insurance. Possibly even life insurance (to pay off jointly-owned debt, for example). Shop around, and compare prices.

Your employer will most likely not be checking for brand names on your clothing. And the size of your television and stereo should not exceed a reasonable portion of your living space.

Regarding investing: fund your retirement account first–the money you put in now will make twice as much as the money you put in ten years from now. Don’t invest all your retirement savings in your first employer’s success. And anyone who advertises their investment in late-night infomercials isn’t making money off that investment, they’re making it off their investors.

Lesson number 4: You Need to Take Care of Yourself
You need to maintain your health. Remember that broken bones cost money now. Don’t drive stupid. Don’t live too hard. Get to know your doctor when you’re healthy (that is, get a physical), so you will know who to call when you’re sick.

Protect your reputation. Remember that Facebook lesson? And don’t mix money with friendship. That means don’t cosign on loans with your buddies or boyfriends or whomever. It’s a good way to ruin a friendship and a great way to ruin your credit history.

Okay. Those are the basics. I know on the surface it seems like a bunch of don’ts. But I also remember that when I was a kid, I was always arguing with my parents for control of my own life. They may not know it yet, but your children have been waiting for this opportunity for a long time. These fundamental lessons can help set them up for success and independence.

Next time we’ll delve a little deeper into the question, “You want to buy WHAT?!” and offer up some tips to help your new grad shop responsibly.

This article was originally included in our email newsletter on August 14, 2009.  It may have been edited somewhat from the version that was originally emailed, so be sure to sign up in the upper right corner of our website to make sure you are getting our email newsletter hot off the press!

With all of the news about spiraling federal debt, it’s natural that Americans are taking a hard look at their own situation, and it sometimes leads to worry–even for those who are relatively secure.

Interestingly, those who have MORE cash in the bank often worry more! Funny, right? But it’s normal human nature…

After a lengthy time of thinking and discussion and some more thoughts into the matter, below are a couple areas that can help us all reduce the worry for money.

1. Realize that It’s Exaggerated. Worry is a funny feeling – it seems to exaggerate any problem. While there are certainly many people who actually run out of money, those are usually not the people that tend to worry. Step back for a moment and rather than focusing on what you don’t have, take stock of your life and realize that all of your needs are met. In fact, if you have a roof over your head, food and clean water you are among the wealthiest 5% in the world.

2. Express gratitude. Take the time to think about the things that you are grateful for on a regular basis. This doesn’t have to be a time intensive process, just work it into your daily routine. For example, consider keeping a gratitude journal and making a quick entry daily. Take the time to recognize and thank those people that are special in your life.

3. Take a break from the news or sources of negativity in your life. Let’s face it, the media is in business to make money and sensationalized stories sell. Similarly, recent studies have shown that our moods and habits are most directly impacted by the 5 people we spend the most time with in our lives. Focus on bringing positive energy into your life. What motivates and energizes you? Try to incorporate those actions or items into your daily life.

4. Spend the Same Time Making Money Instead. Some of the world’s most successful businesses were started during recessions-Microsoft, Burger King, Fed Ex, Trader Joe’s, General Electric, CNN, Hyatt, and more. If you are going to spend time worrying about money, why not use that time and start a side business or job instead? Think about how you might use a favorite hobby to generate some extra cash. Maybe start a website (or two, or three). I know it’s easier said than done, but the more you work at it, the easier it gets.

5. Confidence. Part of the reason why we worry about money is because of the lack of confidence in our own abilities to earn an income. How can you boost your confidence? Confidence comes from success, and success starts from taking action. Begin small. Try a few things. Learn from them and try again. The main difference separating the successful from those that have not achieved their dreams and goals is the willingness to take action.

6. The workplace plays a big role in all this as well. Are your colleagues encouraging? Is your boss supportive? If not, then do something about it. Don’t get into the thinking of “I can’t find another job”. Yes, you can. If you got this job, you can get another one. Rather than focusing on the past or complaining about existing circumstances, why not devote your energy to a plan of action to improve your circumstances?

7. A Little Worrying is Actually Good. A little worrying is actually healthy for us. It’s what drives us to be better. It’s what turns our energy switch to the on position. The right way to deal with it is to channel it into your work ethic, and your desire to be better and reach greater achievement.

Of course, this list is just the tip of the iceberg. How do you deal with worrying about the lack of money? Or do you? What has worked for you? Let me know!

We’ve launched several new tools at the firm over the past few months and I wanted to make sure to get the word out to blog readers, starting with the Kids Protection Planning Guide.

This FREE guide reveals the Nine Insider Secrets to Guarantee Your Kids’ Future Is Never Left in the Hands of a Judge Who Doesn’t Know Who You Are or What’s Important to YOU!

Many of the parents I advise are shocked to discover that in nine out of ten cases, children are not REALLY protected if something happens to their parents—EVEN IF the parents have a will or have previously planned their estate with a lawyer.

That’s why I’ve put together an urgent and important Kids Protection Planning Guide that every parent with minor children must read!

In this FREE Kids Protection Planning Guide, I reveal:

• The 9 simple steps you can take immediately to ensure the safety and care of your children… and why the police might have to take your kids out of your house if you were in a serious accident while you were out, if you don’t plan the right way.

• A 3-step process for choosing the right person to raise your kids… and the 6 common mistakes parents make when choosing guardians for their children.

• How you can make sure everything you leave your kids stays in your family forever… and isn’t lost to divorce, lawsuits, or estate taxes, ever!

• Why these 9 simple steps aren’t something you can just ‘set and forget’ without updating… and the rock bottom, bare minimum review you need to do to ensure the safety and security of your kids.

• How failing to plan could cost your family hundreds of thousands of dollars unnecessarily. (Hint: Did you know that estate taxes and probate taxes can be totally voluntary?)

To get your FREE Kids Protection Planning Guide rushed to you by first class mail, fill out form below!

(Hurry! Guides available while supplies last.)

As the holidays approach, I’d like to encourage everyone to take a few minutes to discuss your family’s philanthropic goals.  The holidays are a great time to start a new family tradition and to discuss the values important to each member of your family while sharing stories of how your parents, grandparents and other family members came together to help others in need.  By combining efforts, families can create opportunities for family giving that go beyond mere financial donations.  To help your family begin the process of creating a family giving plan, we’ve posted a downloadable Charitable Gift Multiplier Guide on our website.  Simply go to: www.CharitableGiftGuide.com and download the free Guide and we’ll help your family walk through the process of multiplying your impact with truly inspired giving.

The following article, written by national legal expert, Alexis Martin Neely, originated from Chris Brogan’s Dad-O-Matic blog.  Alexis was featured in an interview on Good Morning America this morning, where shared some important information that all parents need to hear:

***Featured on Good Morning America***

Here’s the segment on 5 Legal Documents Everyone Should Have

with Chris Cuomo & Alexis Neely

Becoming a dad is the ultimate step into adulthood.  It simply doesn’t get more real than that, does it?  That little face looking up at you makes you realize that life isn’t just about you anymore.  Suddenly, you are responsible for the well-being and care of a little person who is totally reliant on you.  And in some ways, this new “mini-you” that has come into the world makes you feel immortal.

On the flip side though is the lurking thought “what will happen to mini-me if something happens?”  If you are like most people (69%), you push away the thought because it’s too scary to contemplate your child being raised by anyone besides you.

But, here’s the thing … if you aren’t willing to take the time and invest the energy in setting things up for your little one (and her mom) the right way, you will leave your family with a world of hurt if something happens to you.

The good news is that setting things up the right way and doing the right thing by your family doesn’t have to be as painful as you think it will be.  If you are in the know about what you need and how to get it taken care of, getting your personal affairs in order can even be downright enlightening.

Let’s start with the bare minimum of what every dad needs to have in place to make life as easy for his kids and their mom if anything happens.

Document Set #1: Kids Protection Plan
Regardless of the size of your bank account, if you’ve got a child at home who depends on you, you need to have a comprehensive Kids Protection Plan® (KPP) in place to ensure her well-being and care in case you can’t be there.

A KPP begins with naming legal guardians to raise your children if anything happens to you and their mother.  But, that’s just the beginning. A comprehensive KPP will also name local friends or family as guardians for the immediate/short-term care of your children so that the authorities never have to take your children out of your home and into the care of strangers.  With a KPP in place, you’ll carry an ID card in your wallet listing the names and addresses of your immediate/short-term guardians as well as provide written instructions to all of the people who care for your children, such as babysitters and schools.  Finally, a KPP will confidentially exclude anyone you know you would never want to serve as guardian of your children to ensure there are no court-room battles over your child’s care and will also provide detailed instructions about things like health care, education, discipline and your values, so your children are raised the way you want, no matter what.

To get started with your Kids Protection Plan® by naming long-term guardians (which EVERY parent must do), go here and be guided through a process of first choosing the right people to raise your kids if you can’t and then easily document your choices … legally.

Document Set #2: Financial Durable Power of Attorney

A financial durable power of attorney is something every adult needs, even if you don’t have little kids at home.  This document is what will let your family access your bank accounts, pay your bills, and make financial and legal decisions for you if you are hospitalized or otherwise incapacitated.

This story should bring home the importance of having a durable power of attorney in place:

My law firm was contacted by a young woman after her father was hurt at his janitorial job, hospitalized and unable to communicate.  This man thought he didn’t need estate planning because his income was very low and he had less than $10,000 in the bank.

Unfortunately though, his failure to plan left his family in a lurch. They needed the little bit of money he had in the bank, but couldn’t access it without going to Court because the account was in his name and he didn’t have a durable power of attorney naming anyone to act for him legally.

The cost of going to Court was going to cost their family more than the money that was in the bank!

Don’t leave your family in this kind of a painful situation unable to access the limited resources you have because you didn’t do what you need to do.  Be sure you have a financial durable power of attorney in place and make sure it’s comprehensive and will work when your family needs it.

Document Set #3:  Health Care Directive (Living Will)

A Health Care Directive (also known as a Living Will or Health Care Power of Attorney) is another document set that every adult needs, even if you don’t have little ones at home counting on you.

These set of documents do two important things:

1. Appoint the person you want to make health care decisions for you, if you cannot make them for yourself; and
2. Tell your appointed decision-maker how you want those decisions to be made.

Each state has its own rules for how these documents should be prepared.  In some cases, your instructions can be all in one document and in others they need to be two separate documents.  The most important thing is that you get something down in writing.

And, once again, make sure you’ve got something that will really work when your family needs it.  I recommend giving broad discretion to someone you trust to make decisions about all of your health care decisions, including not only life-saving medical care, such as respiration, but continued nutrition and hydration in case you are incapacitated.  If you recall the Terry Schiavo case from several years ago, in which her husband and her parents fought over whether she should be kept alive or not and the case was brought all the way to the Florida Supreme Court, the issue was not whether to continue to keep her lungs pumping, but whether to continue to provide nutrition and hydration – be sure your medical directive addresses these issues.

Document Set #4:  Will:

When it comes to estate planning, most people think of having a Will.  Unfortunately, having a Will often provides a false sense of security to people who think “I have a Will, therefore, I’ve taken care of everything.”  That’s a myth. In fact, your Will is the least important of the 5 legal documents every dad must know about.

A Will sets forth what you want to happen to your assets at the time of your death.  But, here’s the thing, where there’s a Will and your assets are owned in your name, the Will merely acts as instructions to the Court as to what to do with your assets. That means your family is stuck dealing with the Court after you are gone.  Nobody wants that, trust me.

The Court process for handling your assets after your death is called probate.  It’s typically expensive, time-consuming, and always totally public, which means anyone in town can find out how much you’ve left behind, who it went to and when they get it.  That puts your loved ones on the radar of every con artist in the neighborhood.

A Will alone is really only appropriate for dad’s who have no (or very limited) assets titled in their name.  If you have assets, such as a home, bank accounts, life insurance, and retirement accounts, you need to have a Living Trust to keep everything out of court, totally private and make it super easy for your loved ones.
You may have heard that if you only have life insurance and retirement accounts that you could simply name beneficiaries on those assets and avoid probate.  That’s true, but not going to work if you have minor children because they are too young to be the beneficiaries of your assets and would end up in Court with a guardian appointed to handle them.  Not what you want.

Document Set #5:  Trust

If you have financial assets or real estate, you want to have a Living Trust.  A Living Trust is the single best way to make things as easy as possible for the people you love, bar none.

But, and it’s a big BUT, most people who have a Living Trust in place have one that won’t work when their family needs it.
It’s the same for each of these documents I’ve talked about; they are only going to work the way they were designed to work if the law stays the same and your life stays the same.

As your life changes, the documents need to change.
As the law changes, the documents need to change.

And, for your Living Trust, it won’t work unless all of your assets are titled in the name of it, not just once, but every time you acquire an asset in the future.

I’ve met with loads of people who thought they had everything taken care of because they had prepared these 5 documents or had them prepared by a lawyer, but because they had not been kept up to date or their assets were not owned properly, the documents didn’t work!

In fact, that happened in my own family when my father in law died.  He had spent thousands of dollars to work with a lawyer who put in place a set of documents for him and then didn’t keep them up to date and didn’t make sure his assets were owned properly on an ongoing basis.  What that meant is at the end of his life, we were stuck dealing with the one thing he thought he was protecting us against – the probate court and a fight with his ex-wife.

Even Michael Jackson, who no doubt spent hundreds of thousands of dollars with his lawyers, had a trust-based estate plan that he was probably told would keep his family out of court.  As we now know, it must have failed because his family has been dragged into court already multiple times since his death with everything open to the public.

So, yes, these 5 documents are absolutely vital because they will make life as easy as possible for your family, keep your loved ones out of court and get them easy access to your assets in the midst of a crisis, but only if they are kept up to date and your assets are owned properly.

Most people do not have the time, knowledge and discipline to do this for themselves the right way.  If you do, great.  But, who is going to guide your family to make the right decisions and carry things out the right way after you are gone?

Because when all is said and done, that’s really what this about, isn’t?

There’s nothing more important to you than your family.  They are why you do everything you do, right?  So, for them, find a lawyer who will guide you right during your lifetime and be there for your loved ones when you can’t be.  It’s far easier for you to take care of things now, while you are living and able than it will be for them to take care of things after you are gone.  Legal planning is not about the money; it’s about making life as easy as possible for the people you love … no matter what.

Alexis Martin Neely is America’s Personal Family Lawyer, author of the bestselling book “Wear Clean Underwear! A Fast, Fun, Friendly – and Essential – Guide to Legal Planning for Busy Parents” and the nation’s leading legal expert guiding you to smart financial and legal decisions for your family. Subscribe to Alexis’ free online magazine, Family Wealth Secrets, and have wealth advice delivered right to your inbox each week.

Special Update!

In honor of the Dad-o-Matic article and her appearance on Good Morning America, Alexis has convinced her publisher to give her vital book on legal planning for parents (Wear Clean Underwear, Morgan James Publishing 2008) away on Kindle for just .99.  Get your copy today right here.

Lots of people are wondering, what do I do know that the economy appears to be melting down?

First and foremost, don’t panic.  You are not going to end up standing in line for the soup kitchen.  Not if you’re reading this right now.

What you are going to do is get more aware of your family finances, learn to live within your means and generally gain awareness you didn’t have before.

Then, you’re going to look back on this “financial crisis” as the best thing that ever happened to us.

One of the most important things you can do is to establish a family freedom notebook.  This is a notebook that you use to keep track of everything related to the financial well-being of your family.

At a minimum, here’s what you put in it:

1.  Monthly bank statements for every bank account you have, including any custodial accounts in your kids’ names (keep 12 months worth of statements in the notebook and then scan and archive older statements).

2.  Monthly brokerage account statements for every brokerage account you have, including college savings accounts, like 529s (keep 12 months worth of statements in the notebook and then scan and archive older statements).

3.  Monthly retirement account statements for each of your retirement accounts (keep 12 months worth of statements in the notebook and then scan and archive older statements).

4.  Monthly insurance policy statements for each of your insurance policies ((keep 12 months worth of statements in the notebook and then scan and archive older statements).

5.  Copies of your insurance policies (keep these forever).

6.  Documents related to any other assets owned, such as the pink slip for your car or lease papers if you are leasing your car.

7.  Monthly mortgage statements (keep 12 months worth of statements in the notebook and then scan and archive older statements).

8.  Monthly credit card statements (keep 12 months worth of statements in the notebook and then scan and archive older statements).  Also, in this section, keep a list of all of your credit card numbers, along with their security codes and the 800# on the back of the card.  This list will be a lifesaver if you lose your wallet.

9.  Any other loan statements or statements evidencing liabilities you may have, such as student loans, personal loans from parents or car loans.

10.  Family Profit and Loss Statement:  This is a monthly updated ledger of all income that comes into your family and all expenses that go out.

11.   Family Balance Sheet:  Updated monthly, this will list out the current values as of month’s end for each of your accounts, including liabilities.

12.  Estate Planning Section:  Your whole estate plan would be too big to keep in your Family Freedom notebook, but you can keep a CD or jump drive with your estate planning documents on it and any documents related to the transfer of assets into your Living Trust.  Plus, keep your health care directives and powers of attorney in this section as they will need to be accessed immediately if anything happens to you.

13.   Other personal legal documents:  if you own property with anyone else, have entered into any business arrangements, or have personal legal agreements, keep those in this section.

14.  Pay stubs:  keep a year’s worth of the part of your pay stub that shows how much you got paid, how much went to taxes and how many hours you worked.  I can’t tell you how many non-breadwinner spouses have told me they don’t know how much money the breadwinner spouse makes.  Bad idea. Make sure you know and have the records.

15.  Social Security Statement: You know that green and white letter you get in the mail each year that says how much you’ve paid into social security and how much you can expect to get, keep it here.  I can’t promise you’ll actually get this as our system may not have the money to fund it, but you can at least keep the record that shows you paid into the system.

Obviously, this notebook contains very sensitive information, so consider keeping it in a small fireproof safe in your house.  Just make sure the safe is not one that can be lifted up and carried away by a thief.  Make sure it’s the kind that anchors into the ground or the wall.

Please note:  this is not a household notebook or a Family Emergency notebook.  That’s a whole different animal and something that SHOULD be kept accessible to other family members, babysitters and household helpers.

If you have other suggestions for the Family Financial Freedom Notebook, please post them here in the comments.  I would love to hear your ideas.