Are your affairs in order? If a doctor asks you that, it surely instills dread.
But we’re not in medicine, so no worries! We’re in finance. And you’re (presumably) healthy if you’re reading this. So let’s take a non-dreadful look at your affairs when you pass away.
Notice we said “when” you pass. We will all pass one day, guaranteed. With that understood, have you given thought to what will happen with your assets?
If you pass away (in the USA) without a will, your state writes one for you. Is that what you want? Usually, if you are married, all your assets go to your spouse. If not, they may go to your parents or siblings. This is probably not exactly what you want.
Take a few moments to think and pray over whom you would want your assets (both physical, like homes or cars, or intangible, like stocks) to pass to when you die.
Do you have IRAs, HSAs, or other retirement vehicles? These assets are considered non-probate; they don’t go through the courts if you pass. Instead, each vehicle has its own designated beneficiaries who would be able to take possession of the accounts very shortly after you pass, without estate law or probate court. You set these up when you enroll in the plan. Take some time to log in to your accounts and see if these are still the people you want to give this particular asset to. Did one of them pass away? Does someone not need the funds, and you would prefer to distribute them elsewhere?
For other possessions, such as your home, bank accounts, and personal property, you will want to arrange to write a will. If your situation is less complicated, there are free or low-cost legal options online. If you have a more complex situation (second marriages, stepchildren, lots of assets) you may need to hire a professional. Typically, if you are a parent, you will also want to arrange for someone to care for your children if you and the other parent both died. We know this is an uncomfortable discussion, but do it anyway. Look at online resources like Legal Zoom and https://www.freewill.com/.
Once the decisions are made, the document is more of a formality. Make sure to get it notarized and witnessed. Your state may not require it, but it’s a good idea.
You will also want to consider a “living will”, which discusses your medical wishes should you become incapacitated. This isn’t what you wanted to think about today! But it will never be comfortable to think about. Why not make the decisions when you are feeling well?
We will follow up on this post to answer any questions you have. Also, we will be discussing life insurance in a future post.
Resources:
https://esimoney.com/all-about-estate-plans/
https://www.howtomoney.com/arent-wills-for-old-people-episode/
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