by Shannan Denison, CRPC®
Start 2020 by planning for the end. Not this year’s end but your end. Yes, you read that correctly. Think about your own exit strategy; otherwise known as death, kicking the bucket, the final flight, passing to the glorious hereafter, you get the idea. One thing is certain. None of us gets out alive. Sure, we think about our own death. Most would agree that a painless and quick one would be preferable. Not that we are given a choice on the matter, but thinking about death rarely goes beyond that thought. It is prudent and necessary, however, if we want the time of our passing to be as seamless as possible for our loved ones we leave behind.
Consideration #1: What kills us? According to the https://www.cdc.gov/nchs/fastats/deaths.htm the top three causes of death in 2017 in the United States were Heart Disease 23%, Cancer 21% and Accidents 6%. Odds are that your death will be rather sudden. But what if you fell into a coma and the medical professionals had to keep you on life support? Would you want that?
To Do: Create a Living Will with durable power of attorney for health care and for finances. Notarize it. Discuss it with and make copies for the people who are listed to carry out your specific bequests. Put it in a safe place. If you already have one it should be reviewed and updated every three years.
Consideration #2: What does it cost? Dying is a costly affair. Even if you want the bare bones (no pun intended) minimum of cremation and half a dozen death certificates the cost will be upwards of $1000 according to http://www.us-funerals.com/funeral-articles/funerals-and-cremations-in-michigan.html#.XhTAgUdKjIU.
To Do: Plan a funeral or memorial service for yourself. Will it be a church affair or a party at your local watering hole? Determine the overall costs and determine what assets will be used to fund it. This is one reason people need life insurance. The other main reason for life insurance is that you would leave survivors who you are financially responsible for and/or you would have outstanding debt or liabilities.
Consideration #3: Who will inherit my assets? If you die with money in the bank, a retirement account, a vacation home, a life insurance policy, a brokerage account, etc.; do you know who will inherit them? You many have a will which lists your bequests but did you know that the beneficiary designation on an investment account super-cedes what a will says? Maybe you’ve listed a beneficiary but you haven’t listed a contingent beneficiary. A contingent beneficiary is who would inherit that asset if your primary beneficiary predeceases you. If none are listed typically probate court gets involved to determine next of kin. Maybe you don’t want an estranged sibling or your ex-husband to inherit your account. Here are three real life horror stories on how it can all go wrong: https://www.marketwatch.com/story/make-this-estate-planning-move-right-now-check-your-beneficiary-designations-2017-06-29
To Do: Check the beneficiary designations on all of your investment accounts, insurance policies, properties, etc. Obviously, replace beneficiaries who have died. Make sure there are primary and contingent beneficiaries and that percentages are allocated correctly. Also look for misspellings on names. Consider allocating a percentage to your favorite charity or church.
Having your affairs in order is a tremendous gift to leave with your loved ones. When you take care of all of the logistics before-hand will save money and let your friends and family grieve without concern. The details are enough to take care of but if you want to leave behind something extra special consider creating an ethical will. An ethical will is a document you create in order to communicate your values, experiences and lessons with your family. You can find worksheet on what you may want to include here: https://www.everplans.com/articles/ethical-will-worksheet.
To Do: Hold yourself accountable by creating a timeline of when you will have completed planning for your death. Talk to your significant other or trusted friend about your decisions. Enlisting a professional team including a financial advisor and estate planning attorney can also help ease the complexities and help you get the job done.