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We can always find something to worry about, but a recent survey by Bay Alarm Medical indicates that eight in ten Americans are very concerned that they may run out of money as they age. In fact, more Americans are worried that they will face financial instability than they are of their spouse’s death or even their own death. Fortunately, the fear of financial instability is a fear we can mitigate with knowledge and action.

Financial literacy has been an issue for quite some time, which is why the Senate passed a 2004 resolution making the month of April National Financial Literacy Month. The Senate’s goal was to help raise public awareness regarding financial education and the consequences of not understanding personal finances.

Although awareness of the need for financial literacy is helpful, the knowledge part is still challenging. If you are uncertain of your financial literacy, you are not alone. Many Americans do not yet have the ability to understand and effectively use various financial skills such as personal financial management, budgeting, paying bills, setting financial goals and investing. To test financial literacy the National Financial Educators Council (NFEC) created a 30-question test called the National Financial Capability Test. NFEC reports that of the 40,000 people who have taken this test, the average score was less than 68%, with 42% actually failing the test.

You may wonder what financial literacy has to do with estate planning, my answer would be ‘everything’. My clients typically want to know how to achieve two goals. First, how to protect their assets from the high cost of long-term care. Second, how to pass their estate to their heirs without incurring unnecessary expenses or hassles. My advice depends on what assets they have, as well as their income sources such as social security, pensions, and investments.

Most people would have trouble answering questions regarding their assets and income at the spur of the moment, but I have found many of my clients often have difficulty answering these questions even when they can prepare in advance. If you have assets that you do not understand, there are various steps you can take such as reading books or internet articles, or meeting with your banker, insurance agent and financial advisor to ask your questions.

While you are talking to your trusted advisors, take the time to learn how your assets are titled, what type of investment earnings are being produced, whether you have designated a beneficiary, or if there may be penalties for removing funds from the investment. Do not forget to ask some ‘what if’ questions such as “what if I get sick and I need to withdraw either a portion of or the entire account all at once?” Or “what if I pass away, how do my beneficiaries get this account?”

Once you collect this information about your assets, make a list including the information. Keep the list with your estate planning documents and review it periodically to make sure it is up-to-date. Someday, this information will be very helpful to your executor of your estate.

If you find this to be an overwhelming task, set a goal to address a different asset each week or enlist the help of a trusted family member or friend. Then contact your estate planning attorney to incorporate this information into your estate and elder plan!