No one wants to leave their loved ones with burdens after they are gone. Those who have built valuable assets want to know that they will be maintained and respected. Planning ahead can ensure that your legacy will live on as you intended.
To ensure you spend your last days as comfortably as you can, consider developing a plan for your finances. Deciding these issues before it is too late can prevent people from fighting over your care or the assets you left behind. Since there is a lot that you need to do, having a checklist will come in handy for you. Here are the key things you need to look into when putting your finances in order:
Consider Making a Will
If you have made it this far without a will, then you must be fortunate. A will is one of the most important financial documents anyone can and should have. Having a will means that even in death, you get to choose how you would like your assets to be divided. If you are to die without a will, your assets will be distributed according to the intestacy laws in your state. The probate court will be tasked with dividing your assets among the family you leave behind.
A will comes in handy especially if you leave behind young children. You get to choose who will be in charge of your property and who will look after it for your children. While the probate court is empowered to do this in the event of your death, it might not know the people in your life that you would prefer to look after your children after you are gone.
The process of writing a will varies from one state to another. It is essential to understand the rules in terms of witnesses present when signing the will. You should do this when you are still lucid so that your final word on your assets will be taken seriously. If you wait until the last minute, it could be too late.
If you still have a few years and are gaining more assets, ensure you update your will regularly. It ensures that you have all your bases covered and that nothing is left for the court to decide. No one wants their children fighting over assets when they are no more.
Consider Getting a Living Trust
If you have a sizable estate, you might want to consider placing some assets into a trust. It could offer benefits over merely drafting a will. Unlike a will that will only take effect after your demise, a trust takes effect while you are alive. By having a trust, you may be able to ensure that the assets included in it will not be subject to the probate courts if you have no will. Such property can remain private. In case you have someone with special needs in the family, you can also set aside assets for their care.
A trust might also offer some tax savings for your beneficiaries. Since there are costs of running a trust, do your math and consult a certified estate planning attorney before going for it. The types of things you can put in a trust include real estate, insurance policies, jewelry, vehicles, stocks, bonds, and antiques.
Review Your Beneficiaries
To ensure your beneficiaries get what is rightfully theirs, review the list you have written in your will. In case you have insurance plans, consider if the names of the policy beneficiaries on them are still the right ones. Ensure you are thorough when looking through this, as it is an issue many people might bring up in court.
If you have children from a prior marriage, ensure you consider including them as beneficiaries in your will or on an insurance policy. It will go a long way to protect your family from going to court to share the assets you have left them after your demise.
In case you and your spouse have a joint account, check to see if the bank has a procedure for survivorship. The procedure makes it easier for the funds to be transferred to the surviving spouse in the case of sudden death. Setting your account this way makes it easier for your partner to access the funds without having to go through a lot of red tape when you are gone.
Review Your Life Insurance
If you have taken out life insurance, now would be the perfect time to review it. Check to see if you still have enough coverage. This will be dependent on whether or not you are still working and how much you make in a month. In addition to life insurance, it may be advisable to buy long-term disability care insurance. It will come in handy when you are old and need to have nurse care for you or be put in a nursing home. Your family could be saved from the strain of paying for this when you cannot.
Pay Off Any Acquired Debts
No one wants to leave debts to their survivors after death. It would make sense if you died and left nothing behind instead of leaving them with a huge debt they have to pay. While you still can, ensure you come up with a way to pay off all of the debts you owe people. Do not take up new obligations in your later years as you might not be working and might not have the means of paying these debts back. Be comfortable with living within your means, as it will bring you peace as you age.
Planning your finances before dying can be a great gift to your family. You can rest assured that their suffering will be minimized. Take the time and think through all the choices you have made where finances are concerned. When in doubt, talk to an estate planning attorney about it. They are bound to have frank, candid insights on what you could do with your acquired assets. Ensure you plan out what should happen to your assets long before you are incapable of doing it. Taking your time to ensure you have all your bases covered and everyone has been looked after. As much as the probate court may do its best to allocate your assets, no one will do it as well as you.
It might seem like much work for you, but it is inevitable. If you make plans sooner, it will save you from doing it when all you want to do is rest. Your family can also relax knowing they are well taken care of.
*Comments provided in this blog post are for informational purposes only and should not be construed as financial, legal or tax advice, recommendations, or solicitations. Please consult your financial, legal or tax professional with questions related to the information presented, or for advice as to whether a life settlement is right for you.