No one likes to think about dying, but it's something that we all experience, and ignoring it won't make it any easier. And, while it probably won't be any walk in the park for you, remember that your loved ones will be also profoundly affected by your passing.
Indeed, it's not just the emotional effects that they have to deal with; there are a number of other concerns associated with the death of someone close, particularly a breadwinner. Obviously, you want to make things as easy as possible for your family and friends, so it's essential to have your affairs in order. Here are 10 things you can do to prepare for when you finally cash in your chips:
1. Buy Life Insurance
If there are people counting on you for income, you must have life insurance, no matter your age. Whether you have a young family, or whether you're elderly and your pension supports your spouse, it's important to make sure that your obligations will still be met after your death. A financial professional can help you determine whether term life or whole life insurance is best for your particular stage in life. Life insurance can also be used to pay estate taxes, funeral expenses and other costs associated with your death.
2. Prepare a Will
Ensure that your estate is disposed of as you wish. A will can ensure that your wishes are carried out, and that the state isn't making decisions about what to do with your possessions. Your will should provide guidance to your loved ones, and should account for your assets.
3. Consider Ownership
It seems straightforward: You die, your partner gets your stuff, or it is parceled out according to your will. However, it is important to note that there are different ownership arrangements, including different types of joint ownership. Look at your financial accounts, and consult an estate planning specialist, to make sure that ownership of assets is what you want them to be, and that any trusts, investments and other financial items are structured the way you want them.
4. Organize Your Important Documents
You probably have dozens of important documents from birth certificates to home titles to life insurance policies to investment information. All of this information should be organized so that it is accessible. It should be kept in a safe place. Consider a fireproof safe. Then, make sure that there are people who know where these documents can be found, and where the key is located. The idea is to make it easy for your loved ones to find all the information on your situation and assets as quickly as possible. Round up documents instead of leaving them scattered in various places.
5. Arrange for Guardianship
If you're younger, it's a good idea to arrange for guardianship of your children. Discuss your options with your partner, and with those who are likely to be asked to take care of your children, should it become necessary. You can also arrange for guardianship of your spouse, if he or she is incapacitated in some way. If you have pets, it is also a good idea to arrange for their care as well.
6. Know Who Should be Notified
Put together a list of those who should be notified upon your death. You want the right people to be aware of your demise. Your list should include names and contact information of the principal people who need to know of your passing. This normally includes your spouse, former spouses, children, attorneys, insurance companies, estate planners and others who have an interest in your death. Put your list together and leave it with someone reliable. That person's contact information can be carried on your person if necessary.
7. Reveal Passwords
In our digital world, you are likely to have subscriptions, and access to different web sites, accounts and other items. Make a list of relevant accounts and web sites and their passwords. Include instructions on how to cancel different subscriptions. This can be kept with your will, in a safe place with a lawyer, or it can be kept with your important documents. You can also keep it in an innocuous folder on your computer. Make sure that you update this list when you change passwords, and that someone knows how to find this list.
8. Make Peace with Family and Friends
You can make peace with family and friends with who you have had disagreements. Try not to hold grudges, and seek reconciliation with those that you may not be in contact with. Everyone will have better feelings all around if you do this. And you increase the chances that you will die a little more comfortably, with peace of mind, and knowing that you are happy with your loved ones.
9. Look for Loose Ends to Tie Up
Consider things left undone. Before you die, as part of your preparation, think about loose ends that may need to be tied up. Have you always wanted to start a college fund for a grandchild, or create a trust for a charity? If these are things you want to do, either arrange for them now, or adjust your will and estate plan so these items are addressed. Think of the things you want to accomplish, and start doing them now. You never know when your lease on life will be up. Take care of any loose ends you may have now.
10. Determine Powers of Attorney
You'll also need to appoint someone to take care of your affairs just prior to your death, should you be incapacitated. You'll need to appoint a Healthcare Proxy, as well as assign Power of Attorney and make other arrangements. Ensure that your wishes are carried out in that gray area between life and death.
After you have made all of the proper arrangements, it's important to revisit your estate plan regularly. Review your will on a regular basis, and make sure your documents are updated and properly organized. This way, you'll be properly prepared, and changes to your situation will be properly accounted for.