7 Items Your Estate Plan May Have Left Out

If your goal is to look out for your loved ones, consider tackling these estate-planning additional jobs.

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Estate planning is the easiest financial-planning to-do to put off. It’s certainly not fun to ponder your own mortality, and yet that’s the very nature of estate planning. Lawyers are often involved, so it can be hard to get it done on the cheap. And while most financial-planning jobs provide at least some payoff during your lifetime, estate planning isn’t as much for you as it is for your loved ones.

Given all of those reasons, it’s no wonder that so many individuals put off creating or updating on an estate plan. But anecdotally, at least, the pandemic seems to be lighting a fire under some people to get serious about creating or updating their estate plans once and for all. It could be that they’ve been spurred on by the health crisis, which has already claimed too many lives, or they may finally have a bit of free time. A single friend had been lobbing questions at me about executorships and charitable bequests for several years now, but she recently texted me that she’s finally doing an estate plan. Another friend and her husband are updating their documents to reflect what has changed in their lives since they last prepared them. Among other adjustments, they’ve granted powers of attorney and executorship to their now-adult children rather than their siblings, who are aging.

Making sure you have the key estate planning documents in place is important; that means a will, an advance directive (or living will), powers of attorney for healthcare and financial matters, and guardianships for minor children, first and foremost. Trusts may also make sense in certain situations. But there are other add-ons that you can think about in the context of your estate plan, especially if your goal is to make life as easy for your loved ones as possible and to ensure that your wishes are carried out after your death. In contrast with a traditional estate plan, you can craft at least some of these documents on your own, without the aid of an attorney.

In my parents’ later years, I was intimately involved and eventually in charge of their finances, managing their investments, paying their bills from their bank account, and so on. When they eventually passed away, I didn’t have to hunt around for key documents or climb a learning curve about their finances.

But many of us don’t have or want that kind of backup in place, which is why I think it can be helpful to create a financial overview and master directory for your loved ones. (These documents can also come in handy if you’re the main financial decision-maker in your household and your spouse doesn’t pay too much attention.) A financial overview and master directory (the latter of which I’ve detailed below) go hand in hand.

A financial overview lays out the basics of your finances in a straightforward narrative. I think it can be especially helpful if your loved ones aren’t especially conversant in financial matters, or if they’re “words” people rather than numbers-oriented. (One way to think of it is that the financial overview is a Word document, whereas the master directory is Excel.)

I recently created such a financial overview for our household and included the following headings:

  • Our estate plan (in very broad outlines: where to find the documents and who the key agents are–POAs and executors).
  • Our key financial assets (no dollar amounts or account numbers; just where we hold the accounts and who owns them).
  • Our insurance coverage (property/casualty, health, life).
  • Our house (property ID number, whether there’s a mortgage).
  • Cars (VIN numbers, whether there are car payments).
  • Regular household bills that we pay.

2. A Master Directory
Think of a master directory as a detailed version of your financial overview. Whereas the financial overview is a Microsoft Word document, this is the Excel version. For example, your financial overview might say, “We each have 401(k)s through our employers: Emily’s is with Charles Schwab and Jake’s is with Fidelity.” But the master directory would include the actual account numbers for those accounts, the URLs, and the names of any individuals you deal with at those institutions. Because the master directory includes sensitive information, it’s crucial to encrypt it or, if it’s a physical document, to keep it under lock and key.

3. A Plan for Your Personal Property
Most wills will state that any tangible personal property, like furniture, should be sold and the proceeds added to your estate. But if you have sentimental or valuable items that you’d like to earmark for specific individuals, such as jewelry, artwork, or special home items, you can also create a memorandum of tangible personal property that specifies who you would like to inherit those items. For your own sanity, don’t go overboard in earmarking every little thing for specific individuals; focus on those items you treasure that will also have meaning for the recipients. I found that creating such a memorandum–and matching my favorite possessions to the loved ones in my life who I thought would appreciate them the most–to be one of the most enjoyable and cathartic aspects of the whole planning process. In addition, because the memorandum isn’t technically part of your will, you can update it as you obtain or shed possessions (or loved ones!). Such a memorandum is legally binding in most states, as long as it’s mentioned in your will. But even if the memorandum isn’t legally binding, it’s probably still worth doing and assuming that your loved ones will honor it.

4. A Plan for Your Pets
If you’re an animal lover, you know that pets aren’t possessions; they’re part of the family. Thus, more and more estate plans include provisions for pets. There are a few ways to incorporate pets into an estate plan, and they’re a gradation. The gold standard, albeit one that entails costs to set up, is a pet trust. Through such a trust, you detail which pets are covered, who you’d like to care for them and how, and leave an amount of money to cover the pet’s ongoing care. Alternatively, you can use a will to specify a caretaker for your pet and leave additional assets to that person to care for the pet; the downside of this arrangement is that the person who inherits those assets isn’t legally bound to use the money for the pet’s care. At a minimum, develop at least a verbally communicated plan for caretaking for your pet if you’re unable to do so–either on a short- or long-term basis.

5. A Digital Estate Plan
Even people who think they’ve ticked off all of the usual boxes on their estate-planning to-do lists may have overlooked an increasingly important component of the process: ensuring the proper management and orderly transfer of their digital assets after they die or become disabled. Just as traditional estate planning relates to the management and transfer of financial accounts and hard assets, digital estate-planning encompasses your digital possessions, including the tangible digital devices (computers and smartphones), stored data (either on your devices or in the cloud), and online accounts such as Facebook and LinkedIn. The laws around digital assets are changing quickly, and different providers have different policies/level of access. But a key first step is taking an inventory of all of your digital accounts and storing it in a secure but accessible location. You can include it as a separate sheet on your master directory, discussed above. Discuss the existence of this document with your executor, and if you have valuable digital assets (cryptocurrency, for example) you’ll want to be sure to discuss them with your attorney and incorporate them into your formal estate plan.

6. A Plan for the End of Life
If you have an advance directive, you know that it articulates your attitudes toward life-extending care. But these documents are typically boilerplate; they don’t go into great detail on these matters. If you’d like to add additional background for your spouse, children, or other loved ones who might be making healthcare decisions on your behalf, check out “The Conversation Project.” It offers a starter kit to help you clarify your thinking and discuss these matters with your loved ones.

It’s also worthwhile to spell out your wishes and any plans you’ve made for funerals, memorials, and the disposition of your body, either verbally, in writing, or both. Maybe your wishes are simply to have your loved ones say goodbye in whatever way gives them the most peace at that time; in that case, tell them that or write that down.

7. An Ethical Will
Last but not least, consider writing or recording an ethical will that spells out your beliefs and values. In contrast with a conventional will, which lays out how you’d like your financial and physical property to be distributed, an ethical will is a way to “hand down” your belief system to your loved ones. The tradition of ethical wills began in the Jewish community, but it has gained more interest across cultures over the past decade. This is a heavy assignment, so don’t too much pressure on yourself to be profound or to write an ethical will all at once. Instead, consider starting your ethical will by jotting down your beliefs as they occur to you. To help remove some of the pressure, balance light bits of wisdom (“always keep a bottle of champagne in the refrigerator so that you can celebrate happy events big and small”) with the deeper life lessons that you’ve learned.

Complete Article HERE!

A will doesn’t cover all your bases when it comes to end-of-life decisions.

Here’s what else you need

By Sarah O’Brien

  • A will is just one of several legal documents that help your loved ones know your end-of-life wishes.
  • If a person passes away without a will, a court may decide who gets their assets and who would care for any surviving children.
  • However, some assets pass outside of the will, including retirement accounts and life insurance.

As the coronavirus continues sweeping through U.S. communities and the death toll keeps rising, you might be considering your own mortality.

Regardless of the pandemic, experts say it’s important to plan for when you’re not here — that is, give thought to what would happen to your bank accounts, your home and your belongings, as well as, perhaps, your dependents.

That planning should start with a will. And apparently people know they need to take action, based on Google trends showing a jump in searches for information about creating one. 

“In every jurisdiction, if there isn’t a valid will, assets will pass on to your heirs by law, who may or may not be who you would have provided for in a will,” said Samantha Weyrauch Davis, an estate planning attorney and director with the law firm Hall Estill in Tulsa, Oklahoma. “It also lets you name a guardian for children.”

If you pass away with no will — called dying intestate — a state court decides who gets your assets and, if you have children, who will care for them.

This means that if you have an unmarried partner or a favorite charity but no will, your assets may not end up with them. Typically, the courts will pass on assets to your closest blood relatives, even if that wouldn’t have been your first choice.

However, a will is just one piece of an “estate plan.” An estate just refers to what you own — your financial accounts, possessions and any real estate. Putting a plan in place for those assets helps ensure that upon your death, your wishes are carried out and that family squabbles don’t evolve into destroyed relationships.

In other words, it’s partly about making things easier for your loved ones during an already-difficult time.

Here’s what else you should consider if you want to prepare.

What a will can and can’t do

A will is a document that lets you relay who gets what when you pass away. You can get as specific as you want (you leave a certain family heirloom to a particular person) or keep it more general (you want your surviving spouse to get everything).

However, there are some assets that pass outside of the will, including retirement accounts such as 401(k) plans and individual retirement accounts, as well as life insurance policies.

This means the person named as a beneficiary on those accounts will generally receive the money no matter what your will says. (Be aware that 401[k] plans require your current spouse to be the beneficiary unless they legally agree otherwise).

Those [online] forms or software may not be compliant with your local law, so look at the fine print.

Samantha Weyrauch Davis
Director with Hall Estill

Regular bank accounts, too, can have beneficiaries listed on a payable-on-death form, also known as a POD, which your bank can supply.

If no beneficiary is listed on those non-will items or the beneficiary has already passed away, the assets automatically go into probate. That’s the process by which all of your debt is paid off and then the remaining assets are distributed to heirs. The process can last several months to a year or more, depending on state laws and what’s involved in handling your estate.

If you own a home, be sure to find out how it should be titled to ensure it ends up with the person (or people) you want it to, because the laws can vary from state to state. Moreover, there can be other considerations when it comes to how a house is titled, including protection from potential creditors or for tax reasons later when the home is sold.

Another big decision

As part of the will-making process, you’ll need to pick an executor of your will (sometimes called a personal representative).

This can be a big job, experts say. Things such as liquidating accounts, ensuring your assets go to the proper beneficiaries, paying any debts not discharged (i.e., taxes owed to the IRS), and even selling your home could be among the duties undertaken by the executor.

In other words, just because you’ve known your best friend since elementary school doesn’t mean handling the challenge of being an executor is up their alley.

Where to get a will

To prepare a will, you can turn to an estate planning attorney in your local area — to ensure familiarity with state laws — or use an online option. However, be aware that not all of the web-based alternatives will necessarily reflect the specifics of your state’s law.

“There’s risk in doing it that way,” Davis said. “Those forms or software may not be compliant with your local law, so look at the fine print.”

If an online option ends up being appropriate for your situation, you may be able to find a form to download for free. Software will-making options can run about $60 or more, depending on what else is included. To set up an estate plan with an attorney could run several hundred dollars to more than $1,000, depending on the complexity of your situation.

Also, you’ll need to have a witness and/or notary sign it and make the document official, depending on the state where you live. The American College of Trust and Estate Counsel’s website offers a guide to laws and accommodations in every state if in-person meetings are not permitted due to the pandemic.

Other documents

Typically, estate planning also includes preparing a few other legal documents. This includes an advance health-care directive, also known as a living will.

This document outlines your wishes if you become incapacitated due to illness or injury.

Say you are on life support. Instead of a loved one making the agonizing decision whether to end all life-saving measures, your wishes would be specified in a legal record.

It’s also worth assigning powers of attorney. If you become incapacitated, the people to whom you grant powers of attorney will handle your medical and financial affairs if you cannot.

Often, the person who is given this responsibility when it comes to your health care is different from whom you would name to handle your financial affairs.

As with choosing an executor, make sure whoever you hand the financial reins to is trustworthy and smart.

“I tell my clients it’s really important to carefully consider the individuals you name,” Davis said. “You want to make sure they have the ability, skill set, time and desire to make such decisions and do these sorts of things.”

Make a list of critical documents

While it can be hard to imagine your own death, picture your family having to search through drawers for your original will, documents regarding your bank accounts and other assets, and maybe even your Social Security number.

The best way to avoid forcing them to deal with that task on top of mourning is to leave an organized list of information that the will’s executor will need to settle your estate, experts say. Be sure this includes passwords so your online accounts can be accessed.

Consider a trust

If you want your kids to receive money but don’t want to give a young adult — or one prone to poor money management — unfettered access to a sudden windfall, you can consider creating a trust to be the beneficiary of a particular asset.

A trust holds assets on behalf of your beneficiary or beneficiaries, and is a legal entity dictated by the documents creating it. If you go that route, the assets go into the trust instead of directly to your heirs. They can only receive money according to how (or when) you’ve stipulated in the trust documents.

The average cost to set up a trust using an attorney ranges from $1,000 to $1,500 for an individual and $1,200 to $1,500 for a couple, according to LegalZoom.com. Doing it yourself with online software could run several hundreds of dollars or more.

Complete Article HERE!

Planning For The End Of A Life

Talking about death makes many of us uncomfortable, so we don’t plan for it. NPR’s Life Kit offers tips for starting an advanced directive to prepare for a good death.

By Kavitha Cardoza 

MICHEL MARTIN, HOST:

Thinking about death makes most people uncomfortable, which means many of us end up not planning. But Betsy Simmons Hannibal, a legal editor, says it’s like wearing a seatbelt.

BETSY SIMMONS HANNIBAL: We all wear our seatbelts even though we don’t expect to get in an accident on the way to the store. It’s just, like, something that we know is possible.

MARTIN: So buckle up. NPR’s Life Kit looked into preparing for the end, and reporter Kavitha Cardoza is going to walk us through a simple document called an advance directive.

KAVITHA CARDOZA, BYLINE: You don’t need to have a medical background or a lawyer to fill out an advance directive. You don’t even need a lot of time. And I promise it’s not too morbid. You can easily find an advance directive form online. There are different versions, but basically, it has two sections. The first is the most important – the medical power of attorney. Choose a person who can legally make health care decisions for you if you can’t.

PALLAVI KUMAR: Think about the person in your life who understands you, your goals, your values, your priorities and then is able to set aside their own wishes for you and to be a voice for you.

CARDOZA: That’s Dr. Pallavi Kumar, a medical oncologist and palliative care physician at the University of Pennsylvania. She says your medical proxy should be someone you trust who can handle stress because your loved ones will disagree on what to do, and it can be emotional. So you want to name someone who will carry out your wishes. Kumar says research shows when a caregiver sees a loved one die in the hospital under circumstances they believe that person never would have wanted, they’re in emotional pain for a long time.

KUMAR: And at six months and a year after death, these bereaved caregivers are still suffering from pretty severe depression and anxiety. There’s even some data to show that the survival for those caregivers is shortened.

CARDOZA: So think of an advance directive as a gift you’re giving your loved ones. The second section of the advanced directive document is called a living will. This part walks you through the general approach of how you want to die and what kind of care you want. Do you want to be resuscitated? Are you OK being hooked up to a ventilator? How do you feel about a feeding tube? Dr. Jessica Zitter is an ICU and palliative care physician in California. She says there’s no right or wrong decision. It’s personal.

JESSICA ZITTER: Someone once told me her father was – she says, he’s an old, crusty Italian man, and he said if someone else has to wipe my behind, I do not want to live. But there’s many, many others of us – if I was quadriplegic and still have an intellectual and emotional relationship with people, I don’t think I’d want to die.

CARDOZA: Even among patients who are very, very sick with cancer, less than half have had conversations about how they want to die. So it’s critical to share your wishes with your medical proxy and your loved ones as well as your doctor. Share a copy of the form with them.

Dr. Pallavi Kumar says the end of life is about more than just the medical aspect. When she knows a person’s priorities, that helps inform her treatment plan. For some patients, it might mean spending time at home with family. For others, it means trying every treatment possible for as long as possible.

KUMAR: They would say, if you’re telling me that a chemotherapy could give me another month, I want that month because that’s another month I have with my 6-year-old.

CARDOZA: While no one can predict when they’ll die, an advance directive can help you plan for how. It’s not a guarantee but a safety net for having what Doctor Zitter thinks of as a good death.

ZITTER: In order to figure out what a good death is, you have to figure out what a good life is and what living well means to you. That’s the only way to know how to die well because actually, they’re kind of reflections of each other.

Complete Article HERE!

Here’s how unpaid debt is handled when a person dies

By Sarah O’Brien

It’s not unusual for a person to pass away and leave behind some unpaid debt.

For the heirs — typically the surviving spouse or children — the question often is what, exactly, happens to those obligations. The answer: It depends on both the type of debt and the laws of the state.

A person’s assets — no matter how meager or massive — become their “estate” at death. That includes their financial accounts, possessions and real estate. And, generally speaking, it’s the estate that creditors go after when they try to collect money that they’re owed.

“Fortunately for surviving spouses or other beneficiaries, in most cases that debt isn’t something they’d be responsible for,” said certified financial planner Shon Anderson, president of Anderson Financial Strategies in Dayton, Ohio.

However, there are some exceptions.

First, though, some basics.

The process of paying off all your debt after your death and then distributing any remaining assets from your estate to heirs is called probate. Each state has its own laws governing how long creditors have to make a claim against the estate during that time. In some places it’s a few months. In other states, the process can last a couple of years.

Each state also has its own set of rules for prioritizing debt that should be paid from the estate, said Steven Mignogna, a fellow with the American College of Trust and Estate Counsel.

“In most states, funeral expenses take priority, then the cost of administering the estate, then taxes and then most states include hospital and medical bills,” Mignogna said.

However, he added, not all of a person’s assets necessarily are counted as part of an estate for probate purposes.

For instance, with life insurance policies and qualified retirement accounts (e.g., a 401(k) or individual retirement account), those assets go directly to the person named as the beneficiary and are not subject to probate. Additionally, assets placed in certain types of trusts also pass on outside of probate, as does jointly owned property (e.g., a house) as long as it is titled properly.

In fact, a person could pass away with an insolvent estate — that is, one lacking the means to pay off its liabilities — and yet have passed on assets that didn’t go through probate and generally can’t be touched by creditors.

However, a handful of states have “community property” laws, which make debt at death a bit more complex.

Generally, those states view both assets and certain debt that accumulated during the marriage as equally owned by each spouse — meaning a surviving spouse could be responsible for paying back the debt, even if it was only in the decedent’s name.

“Debt that couldn’t have been avoided during the marriage — like medical expenses or a mortgage — generally becomes the responsibility of the surviving spouse in community property states,” said CFP Bill Simonet, principal advisor at Simonet Financial Group in Kyle, Texas.

Yet that doesn’t mean you’d have to pay all of it, he said.

“A well-structured letter with a copy of the death certificate can lead to debt being discharged,” Simonet said. “In the probate process, you let the company know the estate has little to no assets to cover the debt and you ask that it be forgiven.”

Also, any time you jointly own debt — i.e., you cosigned a loan — you’re expected to continue paying if the other person passes away.

“You can ask for debt you cosigned to be forgiven, but don’t expect the request to work,” Simonet said.

It’s worth noting that federal student loans, unlike most forms of debt, are forgiven if the student dies. Parent PLUS loans — often held by parents to help pay for education expenses not covered by other forms of financial aid — are discharged if either the student or the parent who took out the loan passes away.

Complete Article HERE!

Flipflops and tank tops, sockless in sandals…

and dying in Mexico

by Russ Hilderley

USA AND CANADIAN expats face a small mountain of paperwork should someone close to them die in Mexico. An even higher mountain of forms, certified translations, lists of possessions, is forced on loved ones left behind, should the deceased not have any type of ” Last Will and Testament.”

In 2019, 50,000 Canadians were living in Mexico. 182 died. 75% were from natural causes which likely does not include “seasoned” expats sidestepping sidewalk “cenotes”, tripping over abandonned building materials or struck by vehicular traffic while navigating uneven walkways and driveway indentations.

It would seem pedestrians are trampling on private sidewalks originally built by the abutting landholders, but never maintained by them. Uneven heights, slopes, broken curbs and the like can reak havoc on retirees who fly here and walk everywhere thereafter.

Two and a half million Canadians visited Mexico as tourists last year. A significant percentage are in the autumn years of their lives. They may be in Yucatan for six weeks or six months, to escape the colder climate “up north”! Snowbirds(as Canadians and residents from the northern U.S. are called) have an inherent duty to their families “back home”! All expats and tourists alike would be well advised to make it easier to cope, upon the death of a loved one. Important and critical personal information about the deceased must be available to the Mexican authorities from day one. Regardless of your country of origin, the burden is essentially the same.

The whole procedure following the death of an expat residing or visiting Mexico can be daunting for next of kin. The deceased’s identity must be thoroughly established in accordance with Mexican laws.

If the name on the birth certificate is even slightly different from their passport, the transition from one name to another MUST be explained and vertified accordingly. It is particularly cumbersome, should the deceased be a woman. Her birth name could be different through one or more marriages. In each step,the documentation will require translation to “Español” by a registered and authorized translator. The same rules apply to ALL documentation required. “The Last Will”, the identification of all possessions with current valuation held in Mexico by the deceased and the name(s) of next of kin who should be notified, must all be translated in to Spanish .

Expats are urged to maintain a special file back home, or here in Yucatan or Mexico. A designated family member or friend should be aware of this file and where it is stored. The”paperwork” could already be translated and certified. The “executor” of the expat’s estate should be identified with all neccessary contact information tucked away with the deceased passport .

Representatives from the Canadian Consulate in Cancun and similarly designated personnel from the USA Consulate in Merida, appeared before an overflow crowd of over 150 expats at Flamingos Restaurant on the Malecon in Progreso, last Tuesday January 14th,2020.

A funeral home in the Yucatan, is a primary step, to walk you through the process. Cremated remains can be exported within a day or two. A casket requires one or more weeks . The Funeral Director can not forward any valuables such as rings and other jewellry, computers etc..These must be claimed by the contact identified in the Will, or otherwise verifiable family.

Expats living in Yucatan as “Temporary or Permanent” residents should have the LONGFORM marriage certificate which is normally not issued but available in the State or Province where the marriage was performed. This document and your birth certificate should be carried with you as you travel.

Most travellers are optimistic and excited about spending their vacations and retirement without giving much thought to the consequences if they die abroad. Sure,they may have medical and life insurance but forget all the details and information required to repatriate their remains.

To use the now famous phrase quoting reknowned Woody Allen,when asked what would happen to his fortune when he dies, he replied: “If I can’t take it with me, I’m not going” !

We all wish it was that simple!

Complete Article HERE!

The Rising Cost of Not Living

by Mona Chalabi

Jerry Burton was a frugal man. So frugal, in fact, that his possession of an organ donor card was motivated by his disdain for waste. While he was still in hospice care, Jerry made it clear to his son and daughter-in-law that they should shop around to get a good deal on his funeral. They did. In total, the transportation of Jerry’s body, the cremation, and the pickleball tournament that he wanted to be held before his service cost $695. Such bargains are a rarity in America’s modern funeral industry.

The median pricetag of a funeral in 2017 was $7,360—a cost that would take the typical US worker five months of labor to cover. Because of these high prices, many families are panicking at the same time that they are grieving. 

The death of Kara Killeen’s father was followed by calculations that provide a depressing tally of the average American’s struggles. Student debt bills meant that Kara and her sister had less money in the bank (and much of her dad’s retirement money had gone toward helping them cover those repayments, as well as the family’s mortgage). Limited care provision under Medicare meant that Kara’s mother had lost her job to look after her sick husband (and since her job had been writing for the local newspaper, there wasn’t exactly an abundance of new vacancies for her to apply for later). And, like many American families today, the Killeens don’t all live in the same city, so there were flights to think about, in addition to the funeral costs.

Fortunately, an aunt was able to cover Kara’s flight back from Scotland to Ohio. Unfortunately, the fact that Kara needed an intermediary in another time zone to book her travel meant that she made it back two days after her father’s death. Once reunited, the family looked at their funeral options; they were shocked at the prices they were hearing. A reception in a local bar where her dad had been a regular customer would cost $3,000, including catering. They could have held it at their family home for free, instead, but that wasn’t really viable: Kara had come back to discover the house where her mother had cared for her dying husband was a messy cross between a hospital and a home. An urn would have cost $275, programs $160, and an obituary $200, according to the latest averages from the National Funeral Directors Association.   

In the end, with her aunt’s financial support, Kara’s family was able to pay for the cheapest option available: Kara’s father was cremated and his remains were returned to the family in a plastic bag, and there was no funeral. The family still faced a bill for $2,000. “His final mark on the world was just to not have enough money,” Kara told me, bitterly. Funerals are supposed to be a chance to grieve, mourn, and begin the process of emotional recovery after a death; but when money is tight, they can feel like a second trauma. 

In the movies at least, funerals are a chance to meet old friends that you didn’t even know that your dearly departed had. To hear stories that you had never heard before. “You expect everyone to be there,” Kara said. We infer much about a life from a funeral. For no service to be held might imply some secret shame. A small gathering might indicate a lack of popularity. Cheap flowers suggest, well, cheapness. Each of these sentences could just as easily apply to another of life’s landmark social gatherings—weddings—except that marriage customs have changed faster than our death customs. 

It is a matter of personal prerogative whether a couple spends their life-savings on a Star Trek-themed extravaganza or just heads to city hall with two strangers pulled off the street to act as witnesses. That choice is more likely to be seen as a question of taste rather than of moral character. But when the social occasion requires people to be present to honor someone who is absent, then the rules change.  

The desire not to skimp (or at least, to be seen not skimping) leads us to make bad decisions according to Joshua Slocum, the executive director of the Funeral Consumers Alliance, a nonprofit watchdog. “It’s a distressed purchase,” he explained. “No one wants to buy a funeral.” Our decisions are clouded, not just by grief but by the fact that there is no requirement for funeral homes to email you a pricelist or post one on their website. “I can’t think of any other business sector that doesn’t allow you to shop around,” Slocum added. So families will simply choose whichever funeral home they used the last time they had to hold a service. 

What those families rarely realize is that their local funeral home, once run as a “mom-and-pop” family business, is now probably owned by a Wall Street firm. Service Corporation International, or SCI, for example, operates 1,477 funeral service locations and 483 cemeteries across the country, and is worth $13.3 billion (for comparison, the countrywide clothing chain Gap Inc. is worth $8 billion). Shareholders expect dividends and they have to come from somewhere: according to Slocum, SCI charges between 40 percent and 75 percent more for its services than independent funeral homes do. 

The price of dying is also high because there are simply too many funeral homes. Slocum gives me the example of Montpelier in Vermont, the smallest state capital (by population) in the country. The city has two fully serviced funeral homes that, between them, handle an average of seventy-six deaths a year. These businesses have to keep prices high if they want to cover their mortgages and pay their staff. 

I asked Slocum why he became involved in funeral consumers’ rights. He replied simply, “I love Mitford.” It was after reading Jessica Mitford’s classic muckraking polemic on the American funeral industry, The American Way of Death (originally published in 1963), that he became fascinated by the industry and wanted to know more. Little of substance has really changed in the business since Mitford’s book was published except for the escalating prices. Back in 1960, the cost of a funeral was around $700—still a considerable amount of money in real terms, amounting to about seven weeks of a typical worker’s wages at that time (as noted above, by the same measure, today’s figure is at least twenty weeks).

Funeral charges have risen for the same reason that prices have always risen: a disconnect between demand and supply. For a combination of reasons—cost, changing mores, and environmental concerns—more consumers now want their remains and those of their relatives to be burned rather than buried, but the US funeral industry is largely stuck in the past. In fairness, this cultural change has come relatively quickly: in 1960, when Mitford was researching her study, just one in twenty-eight people who died in the US were cremated; today, it’s one in two—half of all funerals. Yet mortician schools still place a heavy emphasis on embalming skills, and more than two thirds of states (thirty-six out of fifty) require funeral establishments to maintain an embalming room (or access to an embalming preparation room); and nearly half of states require a funeral director to be a certified embalmer. Those laws directly contribute to higher prices. In a study published last year, two economists at Kenyon College in Ohio, David E. Harrington and Jaret Treber, calculated that embalming regulations in New York State cost consumers an additional $25.8 million each year.

Although American business traditionally hates regulations, regulating how companies handle and dispose of cadavers makes sense—there are too many public health and public safety considerations involved, let alone consumer rights, for this to be otherwise. “Now, death is seen as an emergency: a dead body has this association of being a biohazard,” explained Caitlin Doughty, who started working in deathcare in 2008 and today owns and runs Undertaking LA. This contrasts sharply with the way a decease was handled 150 years ago, in a pre-industrial era. “Death was a domestic task,” she said. “The women would prepare the body, the men would prepare the casket.”

States began to legislate to control funeral directors around the same time they set professional standards to govern doctors and lawyers, in the mid-nineteenth century. The main aim was to protect the vulnerable—in this case, the bereaved—from charlatans. But many state laws about deathcare now appear outdated or nonsensical. Four states prohibit funeral homes from serving food and beverages entirely, and in New Jersey until very recently, homes could only serve water and peppermints (it is unclear whether such rules arose for reasons of decorum or public hygiene). In five states, funeral directors have exclusive rights to sell caskets, in effect a protectionist measure that blocks cheaper competition—such as Amazon’s “Premium Cardboard Coffin for Adult Funeral,” for just $235.

The outlook seems bleak for customers with few choices and facing high costs. But after sixteen years working in funeral consumer rights advocacy, Slocum doesn’t see it quite this way. “There are two sides to issues like this,” he argues, “and in order to make funerals that are affordable, you need to have both oversight of the industry by the government, but you also need consumers that act with agency rather than being helpless victims.”

It is difficult, though, to think of any other purchase that is quite so unavoidable as paying for a funeral, nor one that demands decision-making at a time when emotional distress is a given. One way to feel empowered in the way that Slocum suggests is to lean, if you can, on your community.

Askia Toure and his two sisters, Sakina and Zahira, were able to turn to the Islamic Society of Greater Houston, Texas, when their mother died of uterine cancer in 2015. The society helped Sakina, who was the only sibling that lived close to her mother when she died, to wash and shroud her mother’s body according to Islamic practice. Two days later, their mother was placed in a plot she had pre-chosen. “That’s how we’ve been raised,” Askia said, “to bury each other with dignity as soon as possible for the least amount of pain or debt inflicted on those who are still here.” When families can’t cover the cost, the community that makes up the membership of the Islamic Society pitches in. Even before Askia’s mother died, the society’s members had contributed to cover the medical costs of her final illness, using a crowdsourcing page. 

Crowdfunding for the funerals themselves is now common. Just one site alone, Go Fund Me, boasts that every year it raises $330 million for some 125,000 memorials (a level of contributions that averages out at $2,640, about a third of the typical funeral’s costs). These sites are especially important for families like the Toures because black American households have less wealth than any other racial or ethnic group in the country. When a large, one-off expense like a funeral needs to be paid, the choice facing such families is often brutally simple: ask for help or sell the car.

Even with a community behind you, bargain-hunting is still important. Non-funeral home options are still limited—and, in fact, can often be even more expensive. You can, it is true, order a cardboard casket from Amazon for as little as $235, but then what? Most states have strict laws about where and how you can dispose of a body. Shopping around for professional funeral services is still the better option for most people. “You can find prices that range from $700 to $4,000 for the same basic service,” said Slocum. “The grief will come, but the terror [of financial ruin] doesn’t have to.”

Funerals are hard because they force us to manage a very practical matter that is simultaneously a profoundly emotional one—to make arrangements amid tumultuous feelings. One thing that can help is to have talked to a loved one before she dies about the kind of funeral she’d want. When it was time for the conversation that Jerry Burton wanted about his desire for a cheap send-off, his daughter-in-law, Melody Burton, a marketing and communications manager from Gresham, Oregon, was apprehensive. But it turned out to be a blessing, not a trauma. “You don’t get to talk about things that are so deeply personal like that very often,” she told me. “It was a beautiful time.”

Complete Article HERE!

Here’s what happens to your partner if you’re not married and you die

There are a number of documents that unwed partners can put in place if they want to make sure each is protected if the other person dies.

By Sarah O’Brien

Maggie Kirchhoff and her partner of 13 years, Matt, have no intention of ever getting married.

They also know it means they won’t get the automatic rights and protections that legally wed spouses get — particularly when it comes to death.

“A lot of spousal rights are inherent with a marriage certificate,” said Kirchhoff, a certified financial planner with Business & Personal Finance in Denver. “For unmarried couples, though, you have to make a concerted effort to cover all your bases.”

The number of unmarried couples who live together reached 18 million in 2016, a 29% jump from 14 million in 2007, according to the Pew Research Center. Among adults age 50 and older, however, the increase was 75%: About 4 million were cohabiting in 2016, up from 2.3 million in 2007.

Although the arrangement has gained broad societal acceptance, according to a separate Pew Research report, such couples still face some key differences from their married counterparts.

For example, filing a federal tax return as a couple is off the table. If your employer happens to extend health insurance to your partner, the amount your company contributes is taxable to you (vs. being tax-free for a spouse).

And, as mentioned, end-of-life considerations need some attention.

About five years into their relationship, Kirchhoff and her partner — who also is a CFP — signed a variety of documents that will dictate what happens if one of them either becomes incapacitated or dies.

In other words, they created an estate plan.

The basics

Remember, “estate” simply refers to everything you own — i.e., financial accounts, real estate and your belongings.

Experts say that creating a plan for what happens to your estate — regardless of how meager or massive your assets — is key for unmarried couples who want their commitment to each other protected in the event of death.

“If I’m married and die without an estate plan, it would be a mess, but the general default would be that everything ends up with my spouse,” said Nick Rosenbauer, an estate planning attorney and founder of the Rosenbauer Law Office in West Chester, Ohio.

“But if I’m not married, the default wouldn’t be my partner,” Rosenbauer said. “It might be my kids or my parents or siblings, but my partner who isn’t legally my spouse would be out of the picture.”

If you die without a will — called dying intestate — the courts in your state will decide who gets what. That process is public and often messy if would-be heirs have competing priorities and conflicting notions of what is rightfully theirs.

That said, a will alone won’t necessarily cover all your bases.

Retirement accounts

If you want to make sure your tax-advantaged retirement accounts — i.e., Roth and traditional individual retirement accounts, 401(k) plans and the like — end up with your partner, make sure that person is the named beneficiary on those accounts.

Even if you have a will that states otherwise, whoever is listed as the beneficiaries on those accounts will get the money. Same goes for insurance policies and annuities.

If no beneficiary is listed, where the money goes depends partly on the retirement plan agreement and on state law. Typically, though, those retirement assets would end up being included in your assets that are subject to probate.

That’s the process of the court validating your will (if there is one) after your death. If there is no will, the court will pass everything on according to state law — which typically means assets will go to the closest living family member who, again, is not going to be your unmarried partner.

Probate is also when creditors can come after your estate for amounts owed and other would-be heirs can contest your will.

Bank and brokerage accounts

If both of your names are on checking, savings or investment accounts, there’s no worry about either of you being able to access them if one of you were to die. The same can’t be said for those with only one person’s name on it.

For any account with only your name on it, contact your bank to find out what form needs to be filled out so the money is left directly to your partner.

“You’d either want to add what’s called a transfer-on-death or payable-on-death designation,” Kirchhoff said.

Again, without those designations, the assets would end up in probate and distributed either in accordance with the will or state laws.

The family house

Regardless of whether you split the mortgage — or whose name is on that loan — the person named on the deed is the owner.

“If the house in one person’s name, it won’t automatically pass to the partner,” Kirchhoff said. “It would become part of the probate estate.”

One option is to make sure both of you are named as joint owners on the deed, “with rights of survivorship.” In that case, generally speaking, you each equally own the house and are entitled to assume full ownership upon the death of the other.

However, there could be other factors to consider before adding a partner’s name to an existing deed, including the cost, tax implications or protection from potential creditors. In other words, you might want to consult with a professional before making the move.

Another option is to leave the house to your partner in your will. Remember, though, any asset passing through the bounds of your will is subject to probate and the potential snags that can come with that.

Consider a trust

Depending on the complexity of your financial situation and the type of assets you own, a trust could be one way to ensure that your partner ends up with what you want them to without any of it being subject to probate.

However, there are other considerations that should factor into whether you create one or not, including whether it would make sense tax-wise, and if the cost (which can be several thousand dollars) is worth it.

Communication

It also is probably worth letting any pertinent family members — i.e., adult children, parents or siblings — know the general intentions included in your estate plan.

While you don’t necessarily need to go into dollar amounts, managing expectations can help avoid discord between your partner and any other family members.

“I always recommend that clients discuss these plans with family to avoid hurt feelings or missed expectations,” said Eric Walters, a CFP and managing partner and founder of SilverCrest Wealth Planning in Greenwood Village, Colorado.

Other considerations

Generally speaking, your partner has no legal say in your medical treatment if you end up in a situation when you cannot make decisions yourself.

If you want to give the person that right, you can give them a durable power of attorney over health care. That will let your partner — or whomever you name — make important health-care decisions if you’re unable to.

This is separate from a living will, which states your wishes if you are on life support or suffer from a terminal condition. This helps guide your proxy’s decision-making. And if you have no one named, medical personnel must follow your wishes in that document.

Additionally, you might want to give your partner durable power of attorney for your finances. This would allow them to handle your money, including accessing your accounts as necessary, if you cannot.

And, Kirchhoff said, don’t forget to put contingent decision-makers on those documents.

“If there’s a likelihood that you and your partner are going to be traveling together, and something were to happen to both of you, then who’s in charge?” she said.

Similarly, if you and your partner have dependents, make sure you designate a guardian for them in your will. Otherwise, that decision will be left to the courts.

Complete Article HERE!