I worked in the financial industry for 19 years. The company I worked for prevented me from ever posting anything that was considered financial advice on social media. Anything and everything needed to be approved through compliance. I support this wholeheartedly.... But now that I don’t represent any company I feel there is important information I have learned along the way I would like to pass along to you. Please know…this is a blog. Not legal advice. I am only writing based on my personal experience.
I am sharing with you because if you haven’t thought about the above questions …what would happen to your family if something happened to you….YOU NEED TO. What is preventing you?
· Is it because you think you are immune from tragedy?
· Is it because you've never given it much thought?
· Is it because you don’t know where to start?
I think, rationally, we can all agree we are not immune from anything. We all know of someone who has been impacted in some way or another by an event they had not anticipated.
We owe it to our children and ourselves to think ahead and protect what is most important. Every time I board an airplane, hop on my bike or drive across the mountain pass I have piece of mind knowing I have done my part to take care of my most precious treasures.
1) Think about who you would most trust to take care of your children if God forbid something happened to you.
2) Think about how you would want to take care of your kids financially. Are they young? Will they need monthly support? Do you want to help pay for their college?
The next piece is SUPER IMPORTANT.
3) CREATE A WILL (and a Trust if your situation requires this.) You can do it one of two ways.
- Online. You can establish a will as cheap as $69 on Legalzoom.com.
- Meet with an estate planning attorney. I would recommend this route because they will ask you questions you hadn't previously considered. They will be better able to hear your needs and create your critical documents the way you wanted.
Everyone’s situation is different, so please know that what I did may not be suitable for you. But it will give you a general idea where to start. I met with an estate planning attorney. Four years ago, my package costs $400. I can update and change my will ANYTIME I want at no additional charge. (This is an awesome feature as our lives can change pretty drastically every 5-10 years.) My $400 provided me with:
- Last Will and Testament
- Durable Power of Attorney (designates who will be responsible for implementing my wishes)
- Health Care Directive (my wishes if I were to become incapacitated)
- Health Care Durable Power of Attorney (who is responsible for fulfilling my Health Care Directive).
4) Consider taking out a life insurance policy. The life insurance policy will pay for things like your funeral expense, your debt, your children’s care, their college education and maybe even a down payment on their first home. Again, this is based on what you dream of for your kids and how you want them provided for if something happened to you.
- Things to keep in mind…there are different life insurance policies out there. Some are basic insurance (ex. you pay a premium just like your auto insurance. You don't receive any of your premium back if you don't use it. This is usually the cheapest kind of insurance.)
- Other insurance options may give you part of your premium back, may invest your premiums in the market, may cover disability insurance, may cover long term care insurance, etc. I’m not going to go into all the different kinds of insurance because it can get confusing. But there are many different insurance options.
5) Who do you trust as the executor of your estate? This person will be responsible for making sure your wishes are implemented.
6) How do you want your asset distributed?
- If you have investment accounts (401k, IRA, savings) the money will be distributed based on what is indicated at the financial firm. So it’s important your beneficiaries are set up correctly.
- If you do set up a life insurance policy and it is a large lump sum…think carefully how you want that distributed. For instance, if something were to happen to me when my kids are young I do not want my kids to receive a large lump sum in their teens. Personally, I’ve seen too many people receive large sums of money and blow it or take up to destructive behaviors because they have the cash. I have it set up in my will they will receive distributions at certain ages and only if they meet certain criteria (drug free, responsible law abiding adults, etc.) I have also set it up that the person who manages their care is NOT managing their money. I have a trustee (whom I trust VERY MUCH and who has always had my kids best interest in mind). They will decide what and when distributions are appropriate.
- I have also set it up so the person working as my executor and trustee will receive a small stipend from the insurance benefit because the amount of time it takes to settle an estate is CRAZY. When we met with an estate planning attorney for my mom he told us it will take anywhere from 250-400 hours to settle the estate.
Once again…this is my personal situation. It may be entirely different for you. I have thought many times of sharing about my experience in regards Medicaid, Medicare, Long Term Care etc…and I will. But it also had me thinking there may be some of you who may not have taken some other critical steps to protect your families. So I started with here and maybe at some point I can move onto my experience with Disability and Long Term care.