You Can’t Take it with You: Getting your Financial Affairs Ready in case of Tragedy
It took me a long time to figure out the title of this article, because I didn’t want it to sound morbid and scare all of you off. But, this is an important matter to discuss. In the past 2 years, I have lost two family members to terminal illness, and it has gotten me thinking about these issues, especially because neither one of them were very prepared before the illness came.
The most obvious thing is that you need to have a will in place. This will is meant to be a step-by-step analysis of what happens to all of your property and accounts in the case of your death. Do not think that this is only for older adults; my one family member who passed was only 44 years old. Make sure that you
What should be in my will?
- Your executor. This is the person that you choose to take care of what happens in the will. This is usually a spouse or other family member. In some cases, it may be a close friend, especially if you are estranged from your family, are unmarried, or have no immediate family still living.
- The rights your executor has. Now, to some people this seems obvious. But you must give specific rights to your executor to manage your property and to pay off your debts, or they will have to deal with the court system in order to do so.
- The distribution of your property and finances. Now, this is difficult for some people.
- Where your children and pets are to go. This may seem silly, but it has caused a lot of issues in the past. What if there is a divorce situation, and there’s a stepparent? They won’t necessarily be the person who gets custody of the child. What if both you and your spouse die? These are important questions to answer, especially if your children are young. Pets are also another important thing to put in your will, for similar reasons. Yes, I know it’s ridiculous, but some people are crazy when it comes to animals.
Another thing that people frequently overlook is retirement funds. If you have a 401k or other retirement fund, you should make sure that you have it indicated in the paperwork where those funds are to go upon your passing.
Life insurance is a huge thing, and you need to have things straight with it or it can cause a lot of issues in the future. Too many people take out too little insurance, leaving your family with extra expenses that they may not be able to afford. The average cost of a funeral and burial ranges anywhere from $5,000 to over $10,000, depending on the funeral home, how your services are conducted, who conducts your service, if you are cremated or just buried, or what have you. Make sure that your wishes for these events are clearly stated in your will as well, instead of your loved ones playing a guessing game when you pass.
One of the biggest tips I have to give you about preparing for tragedy is to keep all of your paperwork in order. My one family member had almost $30,000 in debt when she passed, and her spouse was scrambling to find everything, not realizing the amount that was left. Let people know your accounts, keep them organized in a file cabinet or something similar. It will make things a lot easier for your grieving family members if they can just find information and be done with it.
Death is a difficult thing to discuss, but if you get your finances (and everything else) in order well in advance, those who are grieving will have a much easier time getting through everything. It is much easier to have a plan and just have to say “go” instead of dealing with details and complications in the midst of the grieving process.
