Few people like to ponder their mortality, but what if you didn’t make it home from work today? Is your estate set up to handle your passing? Is your family? If they walked into your home, would they be able to find your important documents? What would you leave behind? What are your final wishes? A sudden death may leave a lot of unanswered questions.
Now that you’re deceased, your estate is in the hands of a loved one who will become the executor or executrix of your affairs. They now have the task of honoring your wishes and settling your estate, and, depending on the size of your estate, this may take a few months to several years.
First, do you have a will or living trust? These items will make life easier for your loved ones. If you have spent time addressing your wishes in a will or trust, then your administrator will be able to honor them in a timely fashion.
Of course, if you don’t have a will or trust, it will be a headache (nightmare) for your loved ones. They’ll be left to figure out your final wishes – no easy task. Dying without a will or trust may also expose your estate to a hefty estate tax, today this rate is 40%.
Do you own pets? Pets need to be fed and cared for daily. Do you have a caregiver for your dog or cat? Who will inherit your animals? If you have more exotic pets like horses, birds, or reptiles, then finding a caregiver for these animals may be a bit more challenging.
Have you updated your beneficiary designations? Will your ex-spouse benefit, financially, from your death? Updating your beneficiary data is easy, so spend a few moments reviewing your retirement accounts and life insurance policies to make sure you have the correct loved ones listed. If you die without listed beneficiaries, your assets will flow to your estate.
Do you own life insurance? Is it enough to pay off all your debts? Carrying the necessary amount is prudent and recommended so that your love ones are not saddled with your debt burdens. If you don’t carry life insurance, or need more, purchase a term policy. It will be your cheapest and most efficient insurance option. Credit cards, mortgages, car loans, and other obligations need to be paid off and this can be done with cash or life insurance proceeds.
Have you thought about life after death? Do you use Facebook, Twitter, LinkedIn, Instagram, Snapchat, Match.com, etc.? Your social media accounts will last forever, and forever is a long time. Your estate documents should reflect your social media accounts and passwords, so your administrator can shut them down. This is also true for your email accounts.
Who will notify your friends and family? Establishing a calling tree is recommended to let your loved ones know you’ve passed away. Your contact list should be listed in your estate documents.
Were you in the military? Do you want a military burial? Will your family be eligible for veteran benefits?
Who has access to your house? Do you have a family member or trusted friend who has a spare key? You’ll need someone to retrieve your mail and tend to other household items like cleaning and yardwork. It’s important to continue to receive mail so your administrator can make sure they’re closing all your accounts like cable and utilities. If you don’t have someone close by, your mail can be forwarded to your administrator.
Who will write your obituary? Have you identified a loved one to write your story? Have you written your own? You want to go out on a high note, so pick someone who can make you look great!
Where will you be buried? Will you be buried? You might prefer cremation. In any event, do you have a family plot or resting place for your ashes?
Don’t leave your estate to chance. It’s imperative to spend a few hours addressing your death. Listing assets, wishes, and other important items in your will is imperative. It’s also important to talk to your children, relatives, or friends, about your estate. The more they know about your affairs, the better.
I also recommend leaving a love letter to your friends and family, so that if you died today they’d be able to start the estate process. What is a love letter? It’s a letter for your loved ones to let them know where your important documents are located and instructions on who to contact for help and guidance. It should be kept in an area where it can be easily found.
I pray you live a long, happy, healthy life free of strife and challenges, so you don’t have to deal with this morbid topic for many moons. Regardless of when you will die, it makes sense to let your loved ones know that you have a plan in place for your passing.
And the dust returns to the earth as it was, and the spirit returns to God who gave it. ~ Ecclesiastes 12:7
Bill Parrott is the President and CEO of Parrott Wealth Management firm located in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm. Our goal is to remove complexity, confusion, and worry from the investment and financial planning process.
Note: Investments are not guaranteed and do involve risk. Your returns may differ than those posted in this blog.