Money is one of those topics we’re not encouraged to discuss openly.
Death? That’s high up on the list, too. As someone who deals with death on a daily basis, discussing is a necessary evil.
So in order to brighten your day, 7 morbid moneys questions to ask yourself. h/t to the Penny Hoarder for coming up with the original idea.
Dying leaves behind loved ones. Dying also leaves behind debts and assets with no home. Think the island of misfit toys but with antiques and QVC jewelry.
If you’ve cared for an aging family member or someone with a long-term illness, you know the kinds of expenses that accumulate.
If you’re young or in good health, you may not think about your own mortality.
If you die unexpectedly, someone will have to put together the puzzle you leave behind.
This to-do list is brief and doesn’t take into consideration each person’s individual circumstances, but if you haven’t done any end-of-life planning, it’s a good place to start.
Not only will it help sort out the money stuff, but it’ll give you some peace of mind, too. Trust me . . .I’m a lawyer.
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Do I Need a Will?
A will isn’t just a thing that people with money or assets make. Do you have a car? A job with a 401(k)? A dog? Then you probably need a will.
If you’re 18 and live away from home, you need the paperwork. It’s just leaving behind instructions. If you are married, you need a Will. Have kids? Will.
Having a will drawn up can cost as little as $5 — yes, it’s really valid in many states — to about $2,500. Most Wills shouldn’t cost more than $300.
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What Will Happen to My Bank Accounts?
If bills will still need to be paid in your absence, consider designating making a bank account payable on death to a beneficiary. This trumps your Will in most states.
It usually takes five minutes to go into your bank and ask to have someone added to your account as the payable on death beneficiary.
You need to give their name and Social Security number. Pick someone you trust.
Having a joint account with your spouse isn’t an easier solution, she warned.
If you both die in an accident, a third-party will still need to be able to access your accounts.
If you get a divorce, make sure you change your beneficiary immediately.
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Should I Have Life Insurance?
You might see infomercials for life insurance when you’re home sick and catching up on “The Price Is Right.” But while the people in the ads may look, erm… elderly, life insurance isn’t just for seniors.
Even if you’re a young, healthy person with no dependents, life insurance can help keep your next of kin afloat while they settle your accounts.
Life insurance for young people is super cheap. Usually less than $100 a month for up to $500,000 in coverage.
Think about what it would cost to have the funeral you’d prefer.
Then, consider your outstanding debts, from mortgages and car loans to private student loans and credit card debt.
On top of that, add in your living expenses for a decade — or longer, if you’d be leaving a spouse or child without your income. Add it all up, and you’ll have a good idea of how much coverage you’ll want.
We personally have enough coverage to keep either of us going for over a decade.
If you’re on the younger side, term life insurance can be considerably cheaper than whole life insurance, and it offers comparable coverage.
With term life insurance, you pay a premium for a certain number of years, and you are covered in the event of your death within that term.
Once it expires, you need to buy a new policy. Take out whole life insurance, and you’ll pay a premium each month for the rest of your life — the only expiration date to worry about is your own.
That’s just a basic rundown of life insurance options. We have more information about the different types of life insurance available
At the very least, make sure there’s money set aside for immediate costs your loved ones will have to handle.
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Does Someone Know Where My Important Documents Are Stored?
Whether it’s a three-ring binder on your bookshelf, a manila envelope on the top shelf of your closet, or what personal finance idol Dave Ramsey calls a Legacy Drawer, you need to set aside a place for your important documents and instructions.
Your funeral instructions, tax returns, your will and the dog’s vet records all need to be easy to find when you’re not there to show someone where your important documents are tucked away.
A safe deposit box is not a good place. These documents need to be accessed sooner than a trip to the bank. Make sure you list your digital assets as well. Facebook, email accounts, bank login info, etc.
You can also leave instructions telling where to find these documents with a legal or financial professional you trust.
The key is to tell at least two people you trust so they know where to go to find out what you want done and what will need to be taken care of. Preferably younger people.
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Who Has Access to My Passwords?
What about your digital life? There are online billing portals and account histories, sure. But what about your Facebook account or your cloud storage.
I recommend keeping a hard copy list of your accounts and passwords, and keeping that list somewhere secure with your other emergency files.
Then, if you have considerable digital assets, like music files, photos or ebooks that you’d like to pass on to someone, make sure you list that person in your legal documents.
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Who Are My Beneficiaries?
Annually check your beneficiary designations, those who get the funds from your accounts should you die.
If you move companies, make sure you update your info on your 401(k), etc.
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Am I Ready to Talk About This (Out Loud)?!?!?!?
It’s really hard to talk about death, especially when it seems far off and hypothetical. But frank conversations now can make life easier later for the loved ones you leave behind.
Talk to your family members about what type of medical care you want. Mention any charitable organizations you might want to leave money to.
If you want to be buried in Hawaii, tell someone or put it in your Will.
Don’t expect to have a quick 20-minute chat with your sibling or cousin over Sunday dinner, but do expect this preparation process to take time and thought.
By putting the financial pieces of the puzzle in place now, you’ll offer a clearer picture to those left behind if you depart unexpectedly.
Get the talk over with and move on with your life. If all else fails, at least you made a lawyer some money.
Stay Rational
-B&T