Provided by Terry Garland and written by Indigo Marketing Agency, a non-affiliate of First Allied Securities, Inc.
No one wants to spend a free afternoon thinking about themselves or a loved one leaving sooner than expected. Death is a sad and uncomfortable topic to deal with, and the many details involved in making a plan for an unexpected death can easily overwhelm anyone.
Psychological studies have shown that grief profoundly impacts our decision-making skills—and not for the better. (1) However, no matter how hard the conversation may be, doing a bit of planning now can ease some of the stress in a time of grief. Here are some ways to make sure everything is in place should an unexpected death occur.
1. Create A Will
A will isn’t for those on their deathbed; it’s for everyone. Unfortunately, around 60% of Americans don’t have a will (2) and barely half of those over age 55 have taken the time to create a will. (3) Your will outlines what happens with your property and dictates guardianship of your children. It also names your executor, who will carry out your wishes. You don’t want to leave these decisions to the State, which is what will happen if you don’t have a will. Make sure your spouse or other family members know how to access your will when the time comes, and remember to review it regularly to ensure it is up to date.
2. Organize Legal Documents
Do you have an organized filing system, or are all your important documents strewn about in different places? Make sure your spouse or children have access to the following documents, which they will need in order to handle any legal details after you die:
- Birth certificate
- Death certificate
- Marriage certificate
- Social Security card
- Automobile titles
- Property deeds
- Insurance policies
- Bank, investment, and retirement account statements
3. Review Benefits
Surviving family members may be entitled to certain benefits, such as Social Security and/or pension benefits, life insurance, and annuities. List out all the details pertaining to each benefit and communicate these to your family. Be sure to include the following:
- Life insurance
- Social Security
- Annuities
- Healthcare, or extended healthcare coverage through COBRA
- Compensation due, such as stock options or unused vacation pay
- 401(k) or pension
4. Communicate Account Details
Finances can get messy when someone dies. You don’t want your family scrambling for money or unable to access account information. They will have enough stress to deal with already, so save them the trouble by making a list of all your financial accounts, including the name of the bank/institution, account number, type of account, name on the account, and contact information.
- Checking account
- Savings account
- Brokerage account
- IRA
- 401(k)
- 403(b)
- Health savings account
- Flexible spending account
- College funds
Don’t forget about debts. Your debts won’t go away just because you do. Your spouse will be responsible for taking over your debts, so do your best to prevent missed payments that could damage credit and cause undue stress. For every debt, communicate the creditor’s name, outstanding balance, name on the debt, loan terms, and the amount, timing, and method of payments.
- Mortgage
- Home equity line of credit
- Automobile loans
- Personal loans
- Student loans
- Credit cards
Make sure your spouse is familiar with recurring household expenses, such as utilities, and how and when to pay them.
- Property taxes
- Electricity
- Sewer
- Water
- Natural gas
- Garbage
- Telephone
- Cable TV
- Internet service
- Landscaping
- House cleaning
- Homeowners association dues
- Other organization membership dues
Finally, provide contact information for your financial advisor, insurance agent, attorney, and accountant. These professionals are trained to know how to handle an unexpected death, and they will be able to direct your loved ones to the right sources of information and help them make the best decisions possible.
5. Update Insurance
Remember, when a retired person loses a spouse, they will be faced with loss of income (Social Security and/or pension) and will now file taxes as single. Stress-test your income plan for this inevitability, and adjust life insurance accordingly.
When was the last time you reviewed your insurance policies? You most likely purchased insurance to protect those you love, so do your due diligence and verify that the various policies are current and beneficiary information is correct.
In addition to the life insurance payout that your family will receive, have all the details for your other policies in an easy-to-find spot. Your spouse will need to contact the companies to cancel or update the policies. This includes medical, dental, auto, long-term care, and homeowners, to name a few.
6. Build A Budget
An important part of developing a plan for your spouse to move forward alone will involve communicating your current spending needs. If you don’t already have a written budget, begin tracking your expenses and create one. It will be an incredible aid when planning for the future.
7. Rely On A Professional
Having a support system with experience in these areas will make your planning process simpler. Take the time now to build a relationship with an advisor and make sure your spouse and family members are involved so that if the unexpected happens, they have someone they can rely on to help them handle matters. Financial professionals are experienced with these situations and can guide you through the steps that apply to your unique circumstances. They will not only help you take care of pressing problems and concerns but can also help you feel more secure in a time of financial change. A financial advisor can make sure your affairs are in order, update your financial plan, and implement appropriate strategies to help you stay on track financially.
Let’s Get Started
At Golden Capital Management, we believe it is worth your time to prepare for an unexpected death before it happens. We help you design a plan that prepares your finances for any situation and every stage of life. Call us at (515) 226-0115 or email info@garlandandassoc.com to get started today!
About Terry
Terry Garland is the founder and CEO of Golden Capital Management with more than 25 years of industry experience. He works with individuals, small-to-medium-sized businesses, and medical professionals, including physicians and dentists, allowing them access to a wide variety of specialized services and investment vehicles to fit their specific needs. He graduated from Drake University and attended the Wharton School at the University of Pennsylvania and is a certified wealth strategist and a registered principal. With offices in Des Moines, Iowa, and Carlsbad, California, he serves clients across the country. Learn more by connecting with Terry on LinkedIn.
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(2) https://www.caring.com/articles/wills-survey-2017/
(3) https://mlaem.fs.ml.com/content/dam/ML/Articles/pdf/ml_LegacyStudy_Final.pdf