Checking a credit card statement. Cleaning the oven. Booking an eye exam. We leave plenty of things until the last minute, and we normally get away with it without it causing anyone else too much stress or upset. But there’s one significant thing that people struggle to confront: End of life planning. Yet it is the last legacy to our loved ones that we leave.
We have all heard those nightmare stories of families gathered in the hospital not knowing what their mother wanted and if she should she be put on life support, or a husband who has no idea where his wife kept the financial information, or if there is any life insurance to help take care of the family in the event of a mother’s passing.
I can’t stand to think of anything worse than my family, in the midst of gut wrenching grief, having to hunt through the house trying to find out where my important documents are, or wondering what type of funeral I wanted and how they are going to pay for it.
Being a financial planner, I have heard those client stories of being left totally unprepared. That feeling is something loved ones never forget. On the other hand, I have also heard clients speak of what a loving legacy their family member left behind by having their affairs in order and how relieved they were to have things organized in the midst of such loss.
So tackling your estate planning head on, and working out now how to leave your affairs in order when you’re gone is a very significant, final act of kindness for your loved ones.
Do It For Those You Love
You may be wondering where to start and it may seem overwhelming at first. However, if you take the steps that follow, one at a time, you, too, can prepare your family for what lies ahead.
Imagine their relief and gratitude to find out that you’ve already taken care of everything. Or better still, maybe you’ve already had “the difficult conversation” and they already know your wishes and where important things are located. They know you have already taken steps to leave your affairs in order.
Leave Your Affairs in Order: A Checklist
#1. Collect and Secure Your Important Documents
As you start to gather your documents together, make sure there’s one central location where you’ve written down all of your important information. What that includes is a matter for you to decide, but there are some fairly vital bits and pieces that even the most organized people may overlook.
Obviously you’ll need to have written down all of your assets, insurance policies, bank accounts and passwords to online accounts. But you can go further than that.
Personal information you might like to keep listed includes information about your educational and/or military history, employment history, names and phone numbers of close friends and important contacts, and the location of important documents like your estate documents, marriage certificate, financial statements, and bank account information.
If you’ve got a pet that might need to be taken care of in your absence, you might need to include their veterinarian’s information or their dietary, health or medication requirements.
I honestly believe that this is so important that I’ve created a family transitions workbook that you can download for free from our website when you subscribe to our newsletter. If you fill in all the required information, it’s going to give your family all that crucial information in one place. Of course, it is important to set a yearly date to revise and update the information.
#2. Make a Will and Review It Regularly
I’m sure you’re aware of the need for a will and may have already created it. If you haven’t, make it a priority – use this article for help. Imagine if you died suddenly; who would be affected? What arguments might it cause if your wishes and feelings hadn’t been clearly laid out? There are horror stories out there about fights over estates, and I certainly wouldn’t wish that on my loved ones.
So, if you’ve made a will, excellent. But do you keep up with reviewing it regularly? Many things are subject to change – your assets will change over the course of your life, and so your will may easily become out of date. It’s all very well getting your affairs in order, but you need to make sure you keep them updated, too.
It’s extremely worthwhile to review your will on a regular basis – remember that relationships change, but also things like tax laws change. You might find out that a plan that felt beneficial a few years ago is suddenly not the best way of doing things anymore, and you could be leaving loved ones less, thanks to newly modified tax rules.
While you’re reviewing your will, review the beneficiaries of any relevant insurance policies and investment accounts, because whoever is listed as your beneficiaries on insurance policies and investment accounts, will receive the assets, regardless of what your will says. Again, something that made sense a decade ago might have changed now. Who should receive any life insurance payout? And who should your HSA be signed over to?
#3. Arrange a Durable Power of Attorney and a Health Care Power of Attorney
Do you know the difference between a durable power of attorney and a Health Care Power of Attorney? It’s important to know, and to have both in place.
When you select someone to be your durable power of attorney, they can make decisions and manage your affairs on your behalf. So it might be someone you appoint to look after your affairs while you go on an extended trip, or because you have a whole lot on your plate.
It can also go into effect should you become mentally or physically incompetent to manage your affairs. They can make decisions regarding all of your personal, financial and business matters.
You also need to appoint someone to be your durable power of attorney for healthcare – the person who will be in charge of making medical decisions on your behalf when you are no longer able to make these decisions for yourself.
With your durable power of attorney for healthcare, construct a living will, or an advance directive. This is a document that outlines what you would like to happen in terms of healthcare – do not resuscitate orders, quality of life issues and so on – if you lose the ability to make those decisions.
It is recommended to appoint two durable power of attorneys – one for matters of health, and one for financial or other personal matters. Sometimes the best person to handle your financial matters is not the best person to handle your health care. Perhaps, you have a brother who is an attorney who would do a great job as your durable power of attorney. And maybe your daughter, who is a doctor, would be the best fit to be your healthcare advocate.
#4. Plan Your Funeral
Let’s be honest – funerals are logistical nightmares. There is so much to think about, at a time when people do not want to have the burden of planning an event, particularly an event they don’t even know if you wanted. There are a lot of complicated expenses too. Wouldn’t you want to know it’s all taken care of?
Also, what if your innermost desire had been to have your ashes scattered at your favorite beach that held so many wonderful family memories, but you never told anyone? If you hadn’t told anybody your wishes, it would certainly cast a heavy burden upon your family to have to decide for you.
And what about taking the opportunity to not only lift all the responsibility of planning from the shoulders of your loved ones, but to really pull out all the stops. Plan the music, the flowers, the pallbearers, the readings. Some people even create laughter from beyond the grave by penning their own obituary.
While there are plenty of companies who help you to save for your own funeral expenses, there are also organizations out there who’ll help you put all those plans in place. This is a great way to alleviate the pain and stress from your loved ones, isn’t it?
#5. Have “The Conversation”
Finally – have the conversation with a close family member or friend. At the beginning of the article, I called it a difficult conversation. And now I’ve removed the ‘difficult’ – very intentionally. This shouldn’t be one of life’s challenges.
This conversation, telling somebody about the location of your important documents, how to crack all your passwords after you’ve gone, your wishes and feelings for your healthcare and your funeral – this is an important conversation that, most of all, communicates love and care. It says, “I will still love you when I’m not here, and this is how I show you.”
If you’d like to have a chat about any of these challenges and about how to leave your affairs in order, please get in touch. We’d love to lift the load and help you with your estate planning.