By Alisa Bashaw
Then it dawned on me that neither my husband nor I had planned properly if something should happen suddenly to either one of us. I didn’t want to make the same mistake that my dad did by not letting anyone in my family know what my wishes were before my death. You don’t want to cause your family any more grief, or trouble when they will already be dealing with your passing.
Most families have one member that is solely responsible for certain bills. When my grandfather passed away, very suddenly, my grandmother was at a loss on where they stood on their bills. She didn’t know when the bills were due, what bills were due or how much, and worse yet what the passwords were to get into the accounts. She ended up spending thousands when she made a large crucial mistake.
So, with all these thoughts running through my mind I started to think about the steps that I needed to take to make sure that my families’ future was secure if the time came when my husband and I were no longer around. I didn’t want to be part of the 43% of Americans that don’t have a will. We took steps to rectify the situation and I want to share some tips I have discovered.
Hopefully, these tips will save your family money, time and any additional grief when the time comes to deal with your death.
Last Will and Testament
This is probably the most daunting task for someone who is trying to look out for the future of their property, children and assets in the event of their death or incapacity.
A will stipulates who will carry out your wishes after your death, who will receive a portion of your assets, who will care for your children and other details pertaining to your household and property. By using a power of attorney you can assign different individuals certain responsibilities. If you do not happen to own a lot of property than a simple will is likely all you need. You can draft one up on your own, but it does come with its own set of problems like outdated information and specific state related tax issues.
Laws and requirements change often and if you do not draft your will correctly you may very well unintentionally give someone more power over your estate than you want. However, at the same time they are a good alternative for people who do not need the in depth assistance of an attorney.
Simple wills have just a few sections where you can specify what happens to your assets, and designate who gets any property you own. Very basic wills are available via SmartLegalForms, LegalZoom, or RocketLawyer. Their templates are available between the amounts of $15 to $80. If you have a more complicated situation than a one-size fits all will solution will not be a good fit for you. If you are unsure find a good lawyer to take a look at your estate.
Should I Hire an Attorney to Write a Last Will & Testament?
It isn’t a bad idea to have a lawyer take a look at your estate even if you do not own a lot of property. One little mistake or overlooked item can mess everything up for your family. With different laws in every state a mistake like not declaring the document a will out loud can make it invalid in certain states. A lawyer can also set up trusts so that your family gets paid out. Revocable living trusts in addition to the will are more private and harder to dispute. It can be changed anytime during your lifetime because you can serve as the trustee on behalf of the beneficiaries you designate.
The last thing you want to do after you pass is to have your documents cause more headaches than they solve. To make the will legally binding you will usually need to get at least two signatures from witnesses who are not listed as beneficiaries. It also advised that it get notarized by a notary public. One can usually be found at any bank.
Add your spouse’s name to your assets. If you bought a home or other piece of property before you were married, use a quitclaim form. You then file this with the county real estate records office in order to add your spouse’s name to the deed. If you fail to do this your property will have to go through probate causing delays in the transfer and will all cause unnecessary costs. Make sure that your spouse’s name is on all bank accounts, stocks, and bonds and that they are also named the beneficiary on all retirement accounts and insurance policies. If you have hidden any assets from your spouse you run a good chance that they will disappear permanently upon your death.
If you have many sources of income you may want to meet with a financial advisor. The National Associate of Personal Financial Advisors (napfa.org) has a list of qualified advisors that can assist you in picking one that fits your needs. With an advisor, you can make your accounts accessible, set up beneficiaries and create spending plans for your surviving family.
This is probably one of the most overlooked items. We take advantage of the fact that we know our passwords and user names, but our spouses probably won’t know our usernames and passwords. This is why it is so important to make a list of online account usernames and passwords. Secure storage sites like SecureSafe are perfect for listing all of the accounts you log into. If you do not feel comfortable keeping all that information online then try keeping it in a notebook locked in a file cabinet. Just do not keep it out in the open for everyone to see. Include login information for email accounts, social networks, personal websites, utilities, cell phones, and any shopping sites where you might have any assets (like Groupon). Make sure that update your password list as often as possible but at least twice a year.
You will also want to consider what you want done with your online life after you pass away. Facebook can memorialize your page, but you may want your family to delete it outright. Additionally, if you want your email accounts deleted you will want to leave those passwords. If you left instructions to have your Gmail account deleted and you didn’t leave your password your family will have to provide a name, address, photo ID, email and a death certificate. It will be much easier for your family if you leave your passwords for them. Why cause more heartache for them?
While you are putting together your list of usernames and passwords include instructions for how you want each account handled and anything specific you want done with your home computer. If you are using Lastpass you can look in your password vault for a full list of all your accounts and passwords and copy the ones that matter.
Like I had said earlier my dad died suddenly and we weren’t ready. We only knew he wanted to be cremated everything else was up to us. He would have wanted to pick out his urn, where his service was, what was included in his obituary, the picture that was used at the service, where the reception was held and probably a little control over what was said at his service. He was a very particular man but because of how sudden it all happened nothing was preplanned or prepaid.
Some people don’t mind leaving all the party preparation details up to someone else and some people want to be involved in planning their party. Well, a funeral is just a big ole farewell party. Some opinions are that the best way to do this is to take as much pressure off your family members by prepaying for your funeral. Other caution against it. Regardless of the choice of whether to prepay or not, if you do not plan for these costs your survivors could be faced with invoices that simply overwhelm them and possibly put them in a horrible financial situation.
The best preparation for tomorrow is doing your best today.
~ H. Jackson Brown, Jr.
There could be costs for preparation for viewing, casket, urn, plot, transportation of remains, burial, cremation, memorial services, flowers, a reception and more. Depending on where you live, the time of the year and the extent of your funeral cost can vary widely. Price out the funeral you want and then you can either prepay for it, add that amount to your life insurance policy or purchase a final expenses insurance policy. All have pros and cons.
With insurance policies, the money could take some time to arrive and may delay the funeral or not arrive in time. It also may not be used for your funeral. Once the money is received by your family it can be used for whatever they deem is necessary. However, it is protected and you rest assure that the money will be there when you pass. If you pre-pay for your funeral you can run into unscrupulous businesses who may go out of business and take your money with it. At the time of your death, your final arrangements may not be available complicating matters and causing the family more grief.
However, if you pre-pay for your funeral and you live for a long time you can save money based on the cost of inflation. You can set up specific arrangements which can be useful in the event that relatives disagree on the kind of funeral the deceased should have.
However, regardless if you want to plan everything or nothing you should consider these three things.
- Do you want to buried? If so you may want to choose a burial plot. The sooner you do this the better, especially if you want to be buried with family.
- Do you want to be cremated? You may want to contact a funeral home to speak with a funeral director about the details.
- Decide if you want to pre-pay for your arrangements. The average U.S funeral in 2014 was $8,000-$10,000 depending on where you live.
Look at the options closely and the pros and cons before choosing.
Considering insurance is a good idea. Disability insurance can be expensive, but term life insurance can be quite competitive. Here is a common formula to find out a good monetary amount to purchase. Add up your mortgage, credit card debt, student loan debt, car loan and so on. Add at least six months’ living expenses and then funeral costs if you have not prepaid. Price out life insurance for that total amount. Term life insurance is there to help people who have lost their loved one avoid out-of-control debt in the event of the sudden loss of one key person’s income. The length of the term and your age with generally cause your premium to go up.
A great website to start with is LifeHappens.org. They offer helpful information related to life insurance. Even a calculator to figure out how much life insurance you should purchase.
The National Association of Unclaimed Property reports that around $32.9 billion assets are currently sitting unclaimed because the state took hold of them instead of the family. Most of your assets will be distributed on your will but you will still have some financial obligations out there in the world. Having all your finances organized so that your family can find everything easily will make everything much easier for them during a difficult time.
Two of the most overlooked documents are life insurance policies especially ones from former employees and retirement plans as well as pensions and annuities. If these accounts exist without your families knowledge they won’t know to claim them and the funds will go to the state.
You will also want to gather together all your debts, especially if you were the one who paid all the bills. To make things easier, you may want to consider adding a family member to at least one of your bank accounts if there isn’t already one on there.
Once you have everything together and sorted out it is time to put it all together and put in a safe place. Make sure to share its location with your family. It is also recommended that you share its contents with a close family member or friend. Some of these items will be physical documents and others will be digital documents but it should include:
End of Life Checklist