Estate planning isn’t easy. That is why you should start worrying about it sooner rather than later.
Facing mortality is never easy, whether it’s our own or of someone we love. But, as we get older, it is impossible to ignore this subject, especially when a family is involved.
Why? Because to keep our loved ones safe, united, and free of conflicts, planning and organizing our estate, final needs, and paperwork is imperative. Stories of families in conflict at the death of a beloved member are, unfortunately, very common, and it gets even worse when there are no documents or a will to ease the fight. Without proper planning on how an estate should be distributed, family members can even land in court.
That is why you should give some thought to the legacy you want to leave and start considering estate planning and last wishes. Regardless of your professional and personal circumstances, this is a necessary step.
Don’t leave your family members in the dark about your plans, no matter how hard it is for you to discuss this matter. Think about it in practical terms. The same way you devote time to planning a family vacation or choosing a new car, you should prepare the legacy you want to leave to your family.
And when we speak of legacy, we mean much more than simply writing a will. It comprehends a lot of organization, planning, and management, not to mention clear thinking and time. And because there’s no better time than the present to put life in order, let’s see how you can start the process on the right foot.
What does it mean to leave a legacy? In short, a legacy is passed from one generation to the next and often refers to money or property.
If you are wondering how to start organizing your estate and last wishes, here’s the most straightforward answer: start by putting together both a physical and non-physical assets list, along with a list of personal documents. Real estate, retirement plans, investments, vehicles, furniture, jewelry, etc. are great examples of what can go on these lists. Even objects that carry emotional value (like a stamps collection or a photography album) are worthy of being included in this step. After all, a personal collection or piece of clothing that carries memories and emotions of a lifetime are worth treasuring.
Then, you can also leave a personal (or even emotional) legacy. What do you want your life to be remembered for? What are the teachings you want to leave for your children and grandchildren? How do you want to be remembered in your community?
There are many ways to leave a lasting legacy that will be remembered for generations. You can champion causes you are passionate about or volunteer. You can seek completeness in all your relationships and be a role model for the younger generations. You can pass on your family’s history by gathering family photos, videos, and stories. The options are truly endless. You just have to look deep inside yourself and determine how you want your legacy to continue among your family members.
And never lose sight of this: the common definition of a life well-lived is more about love and less about money.
Now let’s go back to physical assets.
Regardless of common belief, even people with a modest estate can benefit from end-of-life planning. It can prevent family fights and drama (we have already mentioned how that usually happens in the absence of a will), help you protect your loved ones, and spare them from many burdens and troubles (not to mention a big tax bite). There are several things you should take care of and organize as best as possible. These are the most important ones:
A will is, in simple terms, a rulebook for the distribution of your assets. It is also used to name guardians for minors and to leave instructions regarding final arrangements.
In its essence, it is a document that answers crucial questions, such as: Who inherits the house? The family’s business? A valuable collection? Who will take care of your minor children if something bad happens to you and your partner?
In the United States, wills can be of various degrees of complexity and, depending on the state you are in, follow specific regulations. Nonetheless, an attested written will (which is typed and printed, then signed by the testator and two witnesses) is the most popular type of will in the country.
Undoubtedly, a will is an essential tool to protect your spouse, children, and assets. So if you want to make sure that your wishes are carried out, it is very recommendable to prepare it with an experienced lawyer. Planning a will is trickier than actually drafting it, which is why it is always more reliable to have legal guidance, no matter the complexity of the situation.
If you already have a will, it is essential to review it, at least every two years or when there’s a significant change in your life. For instance, marriage, divorce, or a child’s birth can be a good reason to update the beneficiaries or review how you should distribute your estate.
A power of attorney allows you to name someone to be in charge of making decisions for you if you become incapacitated. In the United States, a power of attorney can be very limiting in actions and duration, or be all-encompassing and lifelong. For most Americans, the wisest decision relies on having a financial power of attorney (that allows someone you designate to oversee your financial affairs) and healthcare power of attorney (that allows someone you designate to make decisions about your medical care). It is possible for the medical power of attorney and financial power of attorney to be the same person, but you can also opt to choose different people for each role.
If you already have a power of attorney, you should periodically meet with your lawyer or advisor to revisit the document and consider whether your choice of a representative still meets your needs. Developments in state law can also affect your power of attorney, which makes it even more important to check it once in a while, even if you have a "durable" power of attorney.
Besides the will and power of attorney, there are many other documents you should keep safe and easy to access. Start by gathering all documents that prove your identity and relationships, such as birth certificate, social security card, marriage and divorce certificates, prenuptial agreements, and so on. Then, gather the necessary information and paperwork on bank accounts, credit cards, mortgages or loans, copies of your latest tax returns, pension, and retirement plans, investment portfolios, titles on any properties, and, if you find important, even household documentation (like utility bills) and a list of your automatically renewed medications.
Finally, if you wish, you can also add to this list a letter with instructions on funeral and burial/cremation preferences. Making your wishes known will make things easier for your family, as they won’t have to second guess what you would have wanted. Although you can include your funeral arrangements in your will or trust, it is recommendable to keep it as a separate document.
Amid all the concern about bank accounts, investments, and personal documents, there’s one thing that usually falls by the wayside: your passwords. And in a digital world like ours, it is very likely that you have collected quite a few during your life.
It might not seem relevant at first, but your significant other, children, and grandchildren need to know how to access your computer, phone, and social media when you’re no longer here. And that is even more true if you use online banking and other similar services. As such, it is essential to create a document where they can easily find this information when the time comes.
Facebook, LinkedIn, and Twitter, for instance, have a section in which you can name someone to take over your account upon your passing. But you should also think about what you want to happen with other sites and applications you have accounts in. With an online password manager, such as 1Password or LastPass, you can share the critical information your family will need to know after you are gone. It is a simple and considerably cheap way (between $40 to $60 per year, approximately) to keep your information organized and easy to access.
Like we have already mentioned, leaving a letter with indications regarding your funeral arrangements can be very important for your loved ones. In fact, even a conversation on the matter can make a huge difference for them. We are all aware that this isn’t a topic most people like to speculate about, but the truth is that doing so can spare family members from doubt and conflict. But it isn’t just about the type of ceremony or flower arrangements you prefer. The big concern is the final expenses.
Failing to plan ahead for those can become a financial nightmare for your surviving loved ones. According to Parting.com, a traditional funeral in the United States costs between $7,000 and $10,000. As you can imagine, that is a considerable expense for a family to face, notably in a time of grief. And it doesn’t end there. Medical bills (especially when it concerns expensive treatments, medicines, surgeries, or continuous medical care) can add up to the funeral expenses, making it impossible for many families to handle.
Apart from that, any debts that you leave will become someone else's responsibility. Once again, such financial responsibility can be immense and drive your family into debt. That is why planning your final expenses is so important. It can spare your family from a significant emotional and financial burden while also allowing them to pursue their life dreams and goals.
At Insurance Supermarket Inc., we are experts in making insurance straightforward, affordable, and customized to everyone’s needs. With that in mind, we created a Final Expense plan designed to help you take care of your loved ones.
Our Final Expense policy aims to protect your family from having to deal with financial distress upon your death. It is a type of whole life insurance that your beneficiary use to pay for your funeral, settle old debts, and pay for outstanding medical bills. Besides, it also serves to leave a legacy and ensure that your loved ones can have a safe and happy life with no financial stress.
And if this sounds like something you would like to leave as your legacy, why don’t you apply for a free quote? Our Final Expense plan has an easy application process with eligibility criteria that every American can meet: you just have to be a US resident between the ages of 18 and 80. Because our goal is to make insurance accessible and convenient for all Americans, we don’t require face-to-face meetings nor medical exams to apply for our plans. It really is that simple.
There’s no rule regarding when you should start organizing your estate and final needs. However, if you have a family you care about, assets that you plan to leave, or if your health is deteriorating, you should start thinking about your legacy. Procrastination is the biggest enemy of financial and estate planning. However, you can always avoid it with a clear goal. In this case, the goal is your family and their unity, stability, and happiness.
Written by Diane Taes