Planning for the End Game
Thinking about your demise is never a pleasant thought. Nonetheless, it is imperative that you take some time to put your affairs in order, just in case. It is easy to put off this task, especially for younger folks. Younger people tend to feel invincible! It is important to remember that stuff happens, though, and preparation is best.
If it helps, think of these tasks as loving kindnesses that you are doing for your family. Getting your affairs in order now prevents them from having to make hard decisions at a devastating time, having just lost you. So, roll up your sleeves and get them done! Some can be done in an afternoon, and some will require more time and potentially some assistance by professionals.
Create or revise your will. The will is the document that dictates what happens with your belongings and financial assets when you die. If you have minor children, it also outlines who should step in and care for your children after you are gone. (A court isn’t bound by what a will says when appointing a guardian for minor children, but, in practice, the parents’ wishes generally carry significant weight with the court.) While unpleasant to contemplate, it is very necessary to have a will, particularly if you have children. Ideally, your will would be drafted in the state in which you reside, and you should review it every few years to make sure it reflects your current wishes.
Update your beneficiaries. While you are at it, review your assets that have a beneficiary designation and make sure these designations are all up to date. Life insurance policies, annuities, pensions, IRA accounts, and other retirement accounts are examples of assets that have a beneficiary designation. The horror story we always share to drive this point home is the second marriage scenario. Your will cannot override a beneficiary designation. If you remarry and update your estate documents, but neglect to change your beneficiaries to reflect your new spouse, guess what? Spouse #1 will inherit the account when you die. So, regular review of your beneficiaries makes good sense.
Have a living will. The living will is a document that describes how you would like things handled at the end of your life, medically speaking. Would you want to be kept alive artificially or not? And what exactly are your wishes in that regard? The living will is a crucial document to help your loved ones know EXACTLY what your wishes are. This prevents the agonizing “what would mom have wanted” conversation.
Health care power of attorney. Along with a living will, this document outlines specifically WHOM you wish to make decisions on your behalf if you are incapable of doing so. It is best to name a few people in priority order, just in case your first choice is not available to help when the moment arises.
Durable power of attorney. The last of the four necessary documents, the durable power of attorney outlines whom you wish to handle your financial affairs if you are unable to yourself. Paying your taxes, paying your bills, withdrawing money from investments – these are all examples of things that are difficult to achieve on your behalf if your loved one or a trusted friend does not have power of attorney.
Use a document locator. In my practice, we created this document for our clients. It is simply a list of where to find all your various important paperwork. Where are your estate documents? Are they in a file drawer? On file with your attorney? This locator outlines where they are kept. It facilitates your loved ones being able to handle your financial affairs in your place by providing a map to where things can be found. Once completed, be sure to provide a copy of the locator to your family, or at least tell them where they might find it in your home. You are welcome to call our office to request a paper or electronic copy of this document locator.
Don’t forget a digital legacy plan. Make a list of all your social media logins and passwords, and make sure that your next-of-kin knows where it is. When you die, the list will facilitate their ability to close out your accounts. Without that information, it can be very challenging to get this task completed.
Streamline your stuff. This recommendation is most applicable to older folks, but it really applies to everyone. If something happened to you today, how difficult would it be for your loved ones to “clean up” your belongings? I have, or course, met people whose opinion on this matter is, “Who cares, I’ll be dead and gone!” But there are also many people that do not want to leave a larger burden than necessary for their family. Perhaps you have had experience yourself with cleaning out a home after a loved one dies – then you know the combination of guilt and inconvenience it can entail. So, make a regular practice of paring down your things. This makes your life easier, but also simplifies things for your family after you are gone.
Consider gifting the heirlooms while alive. Relatedly, if you are older and no longer in need of some of your family heirlooms, consider giving them to the next generation before you die. They might enjoy having them, and you can experience the joy of giving. Alternatively, you might also determine that the next generation doesn’t have a desire to own family heirlooms. In this case, you can work together as a family to determine what the best course of action is. Otherwise, this is just another task that your executor must handle at your death, and his/her way of dealing with it might be vastly different from your actual wishes.
Plan your funeral. Probably the least favorite end-of-life planning is planning the memorial service. However, having witnessed several situations where clients have detailed their desires for their services, or even gone to the lengths of pre-paying for the services, I can say with authority that this is the way to go. Don’t leave your loved ones in a bind, not knowing what Mom would have wanted with regard to a service. My cynical side would also say that in a time of grief, people are more susceptible to being taken advantage of when it comes time to purchase things like caskets and other parts of the memorial service. You probably have some sense of what you would want done for yourself if/when you die, so put it down on paper. Write out the plan of how the service should be conducted, and consider going further and making the arrangements with a funeral home. Your loved ones will thank you for this thoughtfulness!
These are a few things you can do now that will vastly simplify things for your family or friends at your death. Since death is a certainty, these things will need to be done. However, since we typically do not know the timing of our death, a bit of pre-planning will take an enormous burden off our family. Grieving the loss of you will be difficult enough without additional complications, so your family will greatly appreciate the steps you take to prepare now.
Dawn Starks is a CERTIFIED FINANCIAL PLANNER™ practitioner and financial advisor at Starks Financial Group. Starks Financial Group is not a registered broker/dealer, nor is it affiliated with Raymond James Financial Services. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment Advisory services offered through Raymond James Financial Services Advisors, Inc. This article expresses the opinions of Dawn Starks and not necessarily those of Raymond James. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER ™, and CFP® in the U.S. Raymond James is not affiliated with and does not endorse Francine Jay or Marie Kondo.
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Asheville, NC 28801