Category: Financial Matters

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Finances After The Death of a Spouse

– Creating a “Just In Case” Checklist

By Kyle Prevost

Preparing for the death of a spouse has got to be one of the worst personal finance tasks out there.

I think it might be slightly easier for us to prepare for our own demise than it is to place that burden on our spouse. That statement is especially true if your household division of labour is “the norm”, in that one spouse generally defaults to handling most of the financial planning and paperwork.

As I’ve been writing more and more about retirement lately, the idea of a “just in case” file or a “just in case” checklist has come up more and more. I’m not just talking about complicated tax issues to consider when a spouse passes away, or complex estate maneuvers. I’m more referring to how to handle the basic nuts and bolts of day-to-day life.

And remember, if you’ve decided that one spouse is going to be chiefly responsible for the finances, that individual does not have to pass away for a very bad scenario to occur. Cognitive decline is an unpleasant reality for many of us, and there is no obvious way to tell that someone has reached the point where they are decisively not able to handle the household finances any longer.

Planning sooner rather than later for that day is a responsible way to handle an unpleasant situation.

Financial Planning for Death

While financially planning for the death of a spouse – or your own trip to that great tax haven in the sky – is one of the least fun afternoons that I can contemplate, it is quite likely to head off some truly awful scenarios down the road.

Before preparing a “what to do when a spouse dies checklist” like the one below, let’s just get this important step out of the way first and foremost: You really do need to get that Will, Advanced Care Plan (often called a “living will” thanks to US media), and Power of Attorney set up if you haven’t already.

Yes, it’s boring – but it doesn’t have to be time consuming and expensive. I wrote about my personal experience creating a will a few years ago. It cost me $32 and took about an hour.

Also, consider taking an additional half hour to designate the recipient of non-financially valuable possessions that may not have made it into your will. I know several family squabbles that were caused by a combination of grief and irritating disputes over family heirlooms or relatively small possessions that seem much more important after someone has passed away.

What to Put In My “In Case I Die” Checklist

1) A “How To” for Notifying Service Canada of Your Death

Your OAS benefits stop when you do. Your CPP benefits on the other hand are a bit more complicated. You can read our Ultimate CPP Guide for more benefits information, but the most pressing issue will be collecting the death benefit that is part of the program.

2) Transferring Registered Accounts to Surviving Spouse

Ideally you have read our What Happens to Your TFSA and RRSP After You Die article and have identified the beneficiary and successor holder on your accounts. Those accounts will now have to be transferred to your name solely.

3) Removing Name From Shared Accounts and Utility Bills

When someone passes and is survived by their spouse, their name needs to be taken off of shared accounts, as well as utility bills, etc. A list of these accounts will come in really handy.

Settling and Cancelling Credit Cards

If you are always the one that paid the credit card, directions on how to do that, and then cancelling the credit card (or removing one name from the account) are essential.

5) A visual Step-by-Step Cecumulation Plan if You’re Still Managing Your Own Assets – or Revisiting The Idea of an Annuity/Robo advisor.

Robb Engen over at Boomer and Echo was the one who alerted me to the issue of one spouse often being the household “Chief Financial Officer” – and then passing away – leaving a huge burden of responsibility on the remaining spouse when it comes to maintaining the household decumulation plan.

Robb is a big fan of shifting over your assets to a robo advisor sooner rather than later, as they can assist a surviving spouse with basic retirement income mechanics such as selling investments and moving money to a chequing account. They’re also a great option for automating a RRIF drawdown for example.

I think as one gets older and knows their days of handling complicated decumulation strategies are starting to recede into the rearview mirror, the idea of revisiting the idea of annuities really makes a lot of sense.

Regardless of what path you choose, some combination of current-day learning, easy-to-understand graphic organizers showing a step-by-step process, and very specific directions as to what to do with investments, should really be a priority.

Remember, this stuff can be like a very intimidating new language for non-financially savvy folks. We’re looking at a situation where a spouse will have to learn that new language as they grieve and take care of 101 other things. Making things as easy as possible will be much appreciated.

6) A Passwords List

This can likely be combined with the “important stuff binder” below. A non-hackable physical document that either provides simple hints to passwords, or partial passwords, should be written out and stored in an ultrasafe location such as a safety deposit box.

Just think about all the passwords your digital footprint likely includes these days. Take a half hour and make this simple.

7) Navigating Probate and Life Insurance

As part of your will you should think about how the sequence of events will occur once you pass away. Our life insurance for seniors in Canada guide will explain both why you shouldn’t get talked into insurance that you don’t need, as well as what happens to a life insurance payment when you pass. Make sure all of the relevant contact details and the processes involved are easy to find.

8) A Physical Binder of “Important Stuff” For a Safety Deposit Box

In this day and age of online storage you might prefer to make copies of important documents and store them in a super safe online storage solution. But personally, the vast majority of folks that I know are still reassured by the idea of a physical copy of something in a safety deposit box.

Upon your death or the death of a spouse having important documents like birth certificates, marriage licenses, lists of accounts and/or loans, property deeds, pension information, contact details of professionals that you depended on such as accountants or advisers, etc – easily accessible will greatly reduce stress during an inevitable stressful time.

You can also put copies of keys in this binder as well if you really want to make life simple.

Consider leaving a copy of that binder with the trusted individual who will be the executor of your will.

Conclusion – How to Plan for the Death of a Spouse or Loved One

From my limited experience, there is no real way to prepare for the emotional trauma of losing a loved one. That said, there is no need to compound that grief by failing to prepare financially for the death of a spouse or your own demise.

Getting your affairs in order sooner rather than later can mean saving untold heartaches and headaches down the road, so I really do think it’s worth taking the time to do it right.

Complete Article ↪HERE↩!

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The death question

— How to talk to clients about their life expectancy

It may be a grim topic, but death is a key factor in retirement planning.

By Nathan Place

How long do you expect to live? It’s a touchy question, but research shows asking it can significantly help investors prepare for retirement.

Death is rarely a pleasant topic of conversation, but it’s a key factor in retirement planning since the longer you live, the more savings you’ll need to finance your life. But because it’s uncomfortable, many savers avoid realistically estimating their own lifespans — which can lead to poor planning.

“People tend to underestimate how long they will live in retirement, which means they tend to save too little, spend too much and run out of money in later life,” said Olivia Mitchell, executive director of the Pension Research Council at the University of Pennsylvania.

The good news is that, according to new research, even the most cursory conversation on the subject can make a big difference. Mitchell recently co-authored a study by the Leibniz Institute for Financial Research at Goethe University Frankfurt, which surveyed people’s estimates of their own life expectancies. In some cases, the test subjects also read a paragraph about a hypothetical retirement saver (“Mr. Smith”) and answered a multiple-choice question about what he should do.

But the study wasn’t interested in how well the respondents guided Mr. Smith. Instead, it focused on how accurately they estimated their own life expectancies after answering the questions. The researchers measured the gap between people’s subjective and actual life expectancies — in other words, how long they thought they would live versus how long they would probably live in reality, based on their gender, age and other demographics. In general, the average gap was 17.1%. But after reading the Mr. Smith paragraph, that gap shrank by 5.2 percentage points.

“In other words, simply prompting people to think about a financial decision related to longevity risk affected peoples’ estimates of their own anticipated lifespans,” the study said.

For financial advisors, what this means is that even just broaching the subject of a client’s lifespan can substantially help them think more clearly about the future. In some cases, that can mean better preparing for longevity risk — the danger that a person will outlive their retirement savings.

“When financial advisors are doing their jobs well, they will help people understand not only the too-simple concept of life expectancy, but also the notion that half the people live longer than this mean,” Mitchell said. “Therefore, plans are needed to cover the eventuality of living to 100 or beyond, which is what longevity risk refers to.”

Of course, this is easier said than done. How does one remind a client of their own mortality and then have a calm, unemotional conversation about finances? Advisors have a wide range of methods. When possible, some said, it helps to make it funny.

“I find it’s best to be compassionate, direct, and (for the right clients) inject a little humor,” said Louis Leyes, a financial planner and partner at Stages Planning Group in Pennsylvania. For some investors, he puts the question this way: “So, when would you like to take your leave of this mortal coil?”

Lora Hoff, a CFP at IPI Wealth Management in Illinois, said she likes to “keep it light.”

“I say something like, ‘My plan will need to include some assumptions about how long you will live,'” Hoff said. “‘I can use the actuarial default, or I typically use age 100, unless you have some specific preference of what you want to see — I don’t like to kill anybody off in my planning!’ Then I just laugh about it.”

Others use technology, including software like eMoney or MoneyGuidePro, to estimate the client’s lifespan. That way the question stays mathematical instead of emotional.

“We use MoneyGuidePro’s questions about whether they smoke, how healthy they are and the longevity in their family and let the program decide on their lifespan,” said Lisa Kirchenbauer, a CFP and founder of Omega Wealth Management in Virginia. “Then we discuss and change it to fit what the client is comfortable with, explaining the pros and cons of the choice.”

Some advisors say that by treating death as a purely practical matter, they can keep the conversation from getting uncomfortable.

“I actually don’t find it difficult to talk to clients about mortality,” said Anna Sergunina, a CFP and president of Main Street Financial Planning in California. “I explain to them that we need to have an ending point to their financial plan, to make sure we’ve estimated properly how long their money will last.”

Leibel Sternbach, a financial advisor and the chief technology officer of Fusion Capital Management in Texas, said most clients aren’t shocked by the death discussion.

“Our job is to ask the hard questions,” he said. “They know and expect it of us.”

Complete Article ↪HERE↩!

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5 key things to know when you create a will and make other end-of-life plans

By Sarah O’Brien

  • Planning for who makes decisions and who gets what when you die is “a gift” for your family, says a financial advisor.
  • While many people think estate planning is only for the wealthy, experts say that’s not the case.
  • Here are some key things to think about when you give thought to your own end-of-life plans.

Contemplating your own death may not be on the list of things you’re eager to do.

Yet for your family or other loved ones who would find themselves trying to sort out your affairs while also dealing with the emotional fallout from losing you, your having a so-called estate plan is important, experts say. And this is the case whether you are wealthy or not.

“When you get your things in order, it’s a gift you’re giving your family,” said certified financial planner Lisa Kirchenbauer, founder and president of Omega Wealth Management in Arlington, Virginia.

In simple terms, your estate plan spells out who you want making decisions and who will inherit what you own. “Estate” simply refers to possessions and other assets.

Experts say most estate plans don’t need to be complicated. But to make sure your wishes are carried out, they do need to be done correctly — which may make it worth consulting with a local attorney who specializes in estate planning.

Here are five key things to know if you start thinking about how you’d craft an estate plan.

1. A will may not cover all your bases

A will is a basic part of an estate plan. It lets you identify who you want to receive certain property and allows you to name a guardian for dependent children. If you don’t have a will in place when you die, the courts may decide who gets what or who is appointed guardian.

However, some assets pass outside of the will, including retirement accounts such as 401(k) plans and individual retirement accounts, as well as life insurance policies and annuities. This means the beneficiaries listed on those accounts supersede any instructions in your will.

“If your ex-spouse is listed on the beneficiary designation, your ex-spouse will get the money regardless of what your will says,” said CFP Stephen Maggard, an advisor with Abacus Planning Group in Columbia, South Carolina.

Be aware that many 401(k) plans require your current spouse to be the beneficiary unless they legally agree otherwise.

Regular bank accounts, too, can have beneficiaries listed on a payable-on-death form, which your bank can supply. Same goes for brokerage accounts.

If no beneficiary is listed on these various accounts or the named person has already died (and there is no contingent beneficiary listed), the assets automatically go into probate.

That’s the process by which all of your debt is paid off and the remaining assets that are subject to probate — which includes those that pass through the will — are distributed to heirs. This can last several months to a year or more, depending on state laws and the complexity of your estate.

2. You’ll need to carefully pick your will’s executor, other key roles

When you create a will, you name an executor to carry out your wishes and handle your estate. It can be a big job.

Things such as liquidating or closing accounts, ensuring your assets go to the proper beneficiaries, paying any debts not discharged (i.e., taxes owed) and even selling your home could be among the duties overseen by the executor.

This means that you need to make sure whoever you name is up for the job — and that they are amenable to taking it on.

Additionally, an estate plan should include other end-of-life documents, including a living will. This outlines the health care you want and don’t want if you become unable to communicate those desires yourself.

You also can assign powers of attorney to trusted individuals so they can make decisions on your behalf if you become incapacitated at some point. Often, the person who is given this responsibility for decisions related to your health care is different from whom you would name to handle your financial affairs.

Just be sure to name alternatives.

“It’s super important to have backup people in all roles in the estate plan … in case someone cannot serve,” said CFP Jennifer Bush, a financial planner with MainStreet Financial Planning in San Jose, California.

3. Some assets get a ‘step-up in basis’

If you have assets such as stocks, bonds or real estate (i.e., a house) and are considering gifting them to children or other heirs while you’re alive, it might make more sense to wait.

When these assets are sold, any increase from the so-called cost basis (the value when the asset was acquired) and the sale price is subject to capital gains taxes.

However, upon your death, your heirs who inherit those assets get a “step-up in basis.” In other words, the market value of the asset at your death becomes the cost basis for the heir — which generally means any appreciation prior to that is untaxed. And when the heir sells the asset, any gains (or losses) are based on the new cost basis.

On the other hand, if you were to gift such appreciated assets to heirs before your death, they’d assume your original cost basis — which could translate into an outsized tax bill when the assets are sold.

“We find ourselves often recommending that clients give adult children cash instead,” Maggard said.

4. You may want to consider setting up 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 or other concerning behaviors — 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 are left to 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.

5. You’ll need to revisit your estate plan

Anytime you have a major life change — such as birth of a child or divorce — it’s important to review your estate plan.

You’ll want to confirm that your named executor (or trustee, if you set up a trust) is still an appropriate choice. Additionally, check all listed beneficiaries on your financial accounts to make sure no updates are needed.

Additionally, If you move to a new state, be sure to check whether you need to update any part of your plan so it follows that state’s laws.

Complete Article ↪HERE↩!

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The average end-of-life expenses are more than $17,000

— But life insurance can cover that and much more

Whole life insurance has fixed premiums and death benefits, so they won’t fluctuate over the policy’s duration.

By Lina Roby

  • The average family will spend $17,199 on funeral and legal costs before estates are settled.
  • The higher your income, the longer it will take to settle your estate.
  • Even a small guaranteed-issue life insurance plan can counterbalance end-of-life costs.

According to a cost of dying report from, creators of the Empathy mobile app, which is designed to guide families through the grieving and post-death process, the average beneficiary in the US spends $17,199 on things like court costs, funerals, and more. The average estate is not settled for months or even years due to court filings, disputes, and other largely administrative aspects.

What does this mean for loved ones? In short, you’ll need to come out of pocket with $17,199 or more when the the median bank account balance of the average American is just $5,300 according to the Federal Reserve’s most recent Survey of Consumer Finances. This is where having an adequate life insurance policy can make all the difference.

Preparation means communication

Above all else, Empathy co-founder and CEO Ron Gura recommends communication, even over-communication, before death. He says regardless of age, health, or current income, “you need to put your last wishes in place, have sensible conversations with your loved ones, have a guardianship document, advanced directives, etc.”

Free online services allow anybody to create a will. Hospitals will file advanced directives for you. But it starts with communication. We have to talk about death in a way we’ve traditionally avoided in virtually every culture. For many, this also means talking about life insurance and buying a policy that makes sense for you.

How does life insurance protect your loved ones?

A common mantra of experienced life insurance agents and financial planners is also incredibly discouraging for the average consumer: “The most motivated client I have is the one for whom it’s already too late.”

It’s easy to be denied life insurance if you wait too long. Conditions like diabetes, cancer, and sleep apnea affect aging adults without warning, and you may not have as much time as you think. The increase in rates of type 2 diabetes starts at just 45, according to the CDC.

The average figure of $17,199 for costs that must be paid almost immediately after death puts pressure on families already struggling with grief. Even if you’re only interested in a cheap funeral life insurance policy, the price is inevitably lower when you buy early.

When I asked Gura about life insurance in the early days after death, he said, “Whole life and universal life insurance used in planning is very, very impactful. Policies have been around for hundreds of years, and people who have those have one layer less to worry about.”

When I consulted Patricia Stallworth, CFP and financial advisor at The Moneywise Woman, about small funeral policies, she said, “Small policies are a good option if there is nothing else, but they tend to be very costly. If funeral costs are the only concern, I recommend self-insuring if possible. Just setting the money aside in a separate fund – preferably one that is earning interest.”

In short, if you find yourself without savings at a later age, a funeral policy can help your loved ones. However, an interest-bearing fund opened early is best if funeral costs are your only concern. For larger goals like building generational wealth, starting early would be your best option regardless.

Protect loved ones from predatory loans with life insurance

While the average short-term costs after death come in at nearly $20,000, the average American may have just $5,300. Unfortunately, a funeral home has to collect payment at the time of the service to keep its doors open, leaving grieving families stuck in the middle.

It’s unsurprising that, as Gura has found, “25% of people are taking out a loan. Some of the loans are not exactly taken from JPMorgan. They’re taken from predatory lenders at a very vulnerable moment in time.”

Beneficiaries could spend years, even the rest of their lives, buried under the debt of these loan sharks or other predatory loans. The original $17,199 paid will quadruple with interest charges.

Even a $25,000 life insurance policy can pay short-term costs without interest or loan repayment. Ironically, the more money you have, the more beneficiaries pay. As such, life insurance should be proportional to your current income.

Going beyond end-of-life costs 

The lack of financial preparation and communication can financially and otherwise devastate families, especially those already struggling financially. A small funeral policy covering short-term costs can help stabilize loved ones after a loss, but a more extensive policy can build generational wealth.

For example, let’s look at a modest $300,000 whole life insurance policy. Premiums are likely very affordable for young buyers. By the time everything is settled, families might spend around $20,000 to $30,000 to settle a single estate if things go smoothly, leaving loved ones $270,000-$280,000 in tax-free life insurance benefits.

Even if you’re not ready to have the discussion about end-of-life arrangements, life insurance is also made for the living. Many large policies have other withdrawal options built in. More specifically, policyholders can take early withdrawals and life insurance loans.

If you want to see what this means for you, first schedule an appointment with an experienced financial advisor with knowledge of life insurance options. Based on her experience as a seasoned CFP, Stallworth says, “In preparing to help loved ones – depending on the situation, a financial advisor can either work with the estate attorney or go through a checklist of things that need to be reviewed such as wills, the titling of various assets, beneficiaries on various accounts and whether a trust might be appropriate.”

Complete Article ↪HERE↩!

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The Various Costs of Dying

— A new report breaks down what it costs to die, giving further reason to make clear final arrangements

By Emma Suttie

As a culture, we don’t like to talk about death. Even though it’s the destination we all share, regardless of our beliefs, most of us prefer not to think about it. Unfortunately, this aversion leaves most of us unprepared for death when it arrives, making things harder for the loved ones left to manage our affairs.

A new report looks at the cost of dying in the United States, from the material costs to the emotional and physical toll it takes on those left behind.

The report was created by Empathy–a company that helps people manage the logistics and emotional hardships associated with death. The company surveyed almost 1,500 people who had experienced the loss of a close family member in the last five years. Their goal was to try to quantify and better understand what they went through.

Here are some interesting findings from the report:

  • 3 million people die in the U.S. every year
  • 68 percent of Americans who are grieving suffer physical symptoms
  • An average of 540 hours of work are spent settling a loved one’s affairs
  • It takes families an average of 12.5 months to resolve all financial matters after the death of a loved one
  • 20 percent of the workforce is grieving a recent loss at any given moment

The Financial Cost

Perhaps the most astonishing figure from the report was that the average direct financial costs related to the death of a loved one can reach $20,000. This includes things like the cost of the funeral and financial and legal matters that must be dealt with when a person dies.

The report found that the average cost of a funeral is $7,848, the cost of financial matters averages $4,384, and legal matters cost an average of $4,967. Using these numbers, it’s easy to see how the cost can easily climb to $20,000 and beyond. And these are only part of the financial costs associated with dying.

Other financial costs the report included in their analysis are those associated with the total funeral costs, like payments to the funeral home ($3,584), the burial plot ($1,841), catering and refreshments ($602), hiring officiants, priests or other clergy ($472), music ($136), and invitations ($111).

How Loss Affects the Mind & Body

There are other, less tangible consequences as well—like grief—which is a highly personal experience that people are grappling with while having to contend with all the tasks associated with the death of someone they love, which only complicates the process further.

The stress and emotional strain associated with a loved one’s death often lead to physical symptoms. The report found that 93 percent of those surveyed suffered from at least one physical or mental symptom after their loss, 83 percent suffered anxiety, with 46 percent suffering for a few months or more. None of this seems surprising, considering that grief can be an overpowering emotion, and after the loss of someone close to us, we have an immediate increase in tasks and responsibilities to manage the affairs of the one we’ve lost.

Other physical and mental symptoms that lasted more than a few months reported in the study were:

  • Memory problems (30 percent)
  • Unusual anger or irritability (30 percent)
  • Weight loss or gain (33 percent)
  • Irregular sleep patterns (38 percent)

And the above numbers increased significantly if the person happened to be the executor of the deceased person’s estate–a job that comes with considerable responsibility and its own unique stresses.

How to Prepare–for Peace of Mind

Although our views about death are highly individual, there are things that we can all do to help prepare for it when the time comes. Preparation can help us relieve some anxiety, think about what we want, as well as think through some of the logistics, which will help others have a clear roadmap of what we desire and how to make it happen.

There are a lot of things to consider when we begin thinking about our own death. And although this can initially seem an anxiety-producing activity, it can actually be very grounding and help give one a sense of peace.

Here are some things to think about, broken into different categories:

If you are diagnosed with an illness and need healthcare, here are some considerations:

  • Do my loved ones fully understand my condition and what to expect?
  • Have I expressed exactly what medical interventions I want and ones I don’t?
  • At what stage do I want to waive further medical interventions or procedures?
  • Do I have a do not resuscitate (DNR) order that would be enacted after certain procedures or surgeries?
  • Have you chosen someone who can make your healthcare decisions when you can no longer make them yourself? Do they know your wishes?
  • If the healthcare system can no longer help with your condition, what would you like to happen? For example, would you like to be at home?

Personal Considerations

  • What are my beliefs about death? Do I need to make peace with any aspect of this process?
  • Are there any family or friends I want to talk to, and share love and gratitude with so they know how I feel about them?
  • Is there anyone I may have had difficulties with and want to make peace with before I die? Perhaps there is someone who may need my forgiveness or a broken relationship I want to repair.
  • Who would you like to leave your personal belongings to? Make notes as to who should have what so you can make sure people get what you want them to have.
  • If you are a single parent with young children, who will care for them after you are gone?
  • If you have pets, who will look after them?
  • Where are all your personal photos/videos? Are they on a computer? If so, does someone else know how to access them?
  • Have you labeled people in your photos? And where do these personal treasures go when you die? Will they go to children or other family? Having personal effects like photos well labeled is important so your family can identify others later on.

Funeral/Memorial/Celebration of Life Planning

  • What would you like to happen to your body after you die? Do you want to be embalmed? Buried? Cremated? Or do you want a green, or natural burial?
  • Do you have a preference for what casket you would like or how you would like to be buried? If you would like to be buried, where will it be?
  • Would you like a burial plot, headstone or grave marker? If cremated, where would you like your ashes scattered, or who would you like to keep them?
  • Do you want a ceremony of some kind? If so, what kind of ceremony would you like, and how would you like people to celebrate you?
  • Would you like flowers, and if so, what type? Or would you like people to donate to a charity you believe in instead?
  • Would you like someone to deliver a eulogy or have several people speak about your life? If so, speak to them ahead of time.
  • Should you pre-pay for funeral/burial/cremation services ahead of time? It can often be less expensive when done in advance.

Legal Considerations

  • Consider writing a will to make your wishes known and have them carried out legally.
  • Do you want someone to be your power of attorney?
  • Make a list of your assets so you can decide who you would like to have them.
  • Organize and store important documents and passwords so they can be easily found and accessed.
  • Talk to your loved ones about your wishes.

If you need a little inspiration, BJ Miller, a practicing hospice and palliative care physician, gives a moving TED talk about what really matters at the end of life.

Here are some resources to help guide you through the process and keep you organized as you go:

Final Thoughts

Although this all might seem a bit daunting initially, you can do what is comfortable and take your time. Choose which tasks are important to you, and work your way through them at your own pace.

Although some people are blessed to know that they are coming to the end of their lives and can prepare, many of us will not know in advance.

Thankfully, we can choose to do any of the things above at any time. Perhaps more important than anything is the way contemplating death can remind us of how precious life is and how important it is to cherish every moment and let the people in our lives know what they really mean to us.

Complete Article ↪HERE↩!

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Estate Planning

— An At-a-Glance Overview

Estate planning, or legacy planning, entails preparing your affairs for the future, including death and other life events. While older adults might give more thought to estate planning, it is an essential tool at any age.

Why It’s Important

With estate planning, individuals and families can protect their interests after death or incapacity.

  • You can provide for their spouses, children, and dependent family members when you pass away.
  • You can arrange your care and financial affairs should you suffer a severe accident or illness that renders you incapacitated.
  • If you are a parent, you can nominate a guardian to care for and manage the inheritance of your minor children.
  • If you own a business, you can prepare to transfer it to family members, colleagues, or other trusted individuals.
  • You can make arrangements for your long-term care when you can no longer live on your own.
  • You can also make funeral preparations, determine what happens to your body when you pass, and prepay for your funeral, all of which can help lessen the burden on your family members.

What Is an Estate?

Legacy planning entails passing on your estate. Your estate is everything you own, including:

  • Savings and checking accounts
  • Retirement accounts
  • Investments
  • Life insurance
  • Annuities
  • House and other real estate
  • Car
  • Personal possessions, such as jewelry, furniture, and sentimental items

When you die, your estate encompasses all your property upon death. If you sold or gave away property before death, it is no longer part of your estate, and you cannot transfer it upon death.

Items you own with another person are also part of your estate. Depending on the type of asset, it might automatically pass to the other owner. For instance, if you own a home with your spouse as tenants by the entirety, it will pass to your spouse upon your death.

What Is an Estate Plan?

An estate plan consists of legal documents and arrangements that determine the distribution of your assets when you die or outline your care if you become incapacitated.

While a will can be a central component of an estate plan, a solid plan encompasses more than a will. It can also include legal tools that allow assets to pass outside of a will and probate, the process by which a court oversees the distribution of assets in a will.

Estate Planning Tools

In addition to your will, your estate plan could include the following:

  • Purchasing jointly owned property or adding a joint owner to your property
  • Designating a beneficiary on a pay-on-death bank account, retirement account, or annuity
  • Buying life insurance to benefit your family should you pass away
  • Creating a trust for a child
  • Obtaining long-term care insurance to cover future nursing home or assisted living fees
  • Executing power of attorney documents, naming health care and financial agents
  • Making a living will, providing instructions for care should you become incapacitated
  • Preparing a transfer on death instrument to pass ownership of your property to a beneficiary upon death

What Is an Estate Planner?

As professionals helping people make future arrangements, estate planners are attorneys who focus on end-of-life preparations. Estate planning attorneys assist people with drafting legal documents and understanding laws and taxes that could affect them and the loved ones they will leave behind.

When creating estate plans, individuals may need to consult attorneys as well as other experts, including financial planners, accountants, life insurance advisors, bankers, and real estate brokers.

What Does the Final Distribution of Assets Involve?

The final distribution of assets is a conclusory step in the probate process before the court closes probate. When an estate goes through probate, the personal representative must satisfy all debts, and the court must resolve all disputes before allowing the beneficiaries to receive the assets. The court transfers ownership of the assets to the beneficiaries during the final distribution of assets.

Do I Need a Lawyer for Estate Planning?

Although the law does not require that individuals secure legal representation to make estate plans, many find the support and guidance of estate planning attorneys invaluable. An estate planning attorney can help you identify the legal tools and strategies that suit your needs, as well as draft the necessary documents, such as wills, trusts, and powers of attorney. A legacy planning lawyer can help you preserve your estate’s wealth and may work with tax professionals.

In addition to addressing tax concerns and drafting documents, these attorneys can help you avoid probate. Probate, the process by which the court oversees the distribution of assets in a will, can be expensive and time-consuming for surviving family members. It also opens the door for disgruntled people to challenge the validity of the testamentary document, further complicating asset distribution. An estate planning attorney could help you organize your assets to transfer outside of probate to make the transfers simpler, easier, and less vulnerable to challenges.

Consult with an estate planning attorney in your area for assistance in creating a legacy plan.

Complete Article ↪HERE↩!

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Dying Can Cost Loved Ones $20,000 Before Lost Wages And Worse Health, New Report Says

By Deb Gordon

If you think the cost of living in the United States healthcare system is high, wait till you see the cost of dying.

A new report details the direct financial impact of a loved one’s death, as well as the less tangible costs of loss.

The 2023 report on The Cost of Dying was released today from Empathy, a company that helps people manage the logistics and emotional burdens of death. The report includes results from a survey conducted with nearly 1,500 people who had lost an immediate family member in the prior five years.

Overall, the average direct costs related to the death of a loved one can reach $20,000. That’s before factoring lost income from taking time off or healthcare costs required to manage health and mental health symptoms.

On average, survey respondents reported that they paid $3,584 to the funeral home (lower than the 2021 national median cost of $7,848 reported by the National Funeral Directors Association). Burial plots cost respondents an average of $1,841. Smaller expenses, such as catering, officiants, flowers, music, and invitations can add more than $1,700 combined, making the funeral the single biggest expense associated with a loved one’s death.

But the costs don’t end with the funeral. Survey respondents reported paying an average of $4,384 to deal with financial matters, such as hiring accountants and paying bills.

Respondents spent nearly $5,000 on legal matters, including lawyer fees and costs associated with selling off assets. Disposing of real estate can add another $4,000.

Many respondents reported using their own financial resources to pay death-related bills; 42% used their own credit cards or checking accounts and 36% used their savings. Just 14% were able to tap into funds specifically designed for these purposes, such as life insurance or last arrangements insurance.

Rinal Patel, founder of Pennsylvania-based Suburbrealtor, experienced firsthand the costs associated with the death of a loved one.

In February 2022, her 35-year old brother died of a heart attack while he was in Dubai for work. Patel spent more than $4,000 to fly his body back from Dubai and footed the entire bill for his funeral, about $10,000.

“He was my only brother, and I couldn’t let him be buried in a foreign country,” she said.

In addition to direct costs, Patel’s brother’s death also cost her income. As a business owner, Patel missed out on deals while she was away mourning her brother.

“His death cost me a lot financially, emotionally, and psychologically,” Patel said.

Lost work

Death-related costs hit at a time when many people can least afford them.

Nearly all (92%) employed respondents reported taking time off or adjusting their work commitments to manage the experience. For many workers, that costs them money indirectly.

Nearly one-quarter (23%) of respondents reported taking unpaid time off, while about half (51%) took paid time off. Women were more likely to take unpaid time off than men, and half as likely as men (9% vs. 19%) to report feeling satisfied with their employer’s bereavement leave policy.

Empathy’s report says that most U.S. companies offer one to five days of bereavement leave. But most people need more time than that to manage logistics of death, let alone to properly grief.

Jasmine Cobb, a licensed grief and trauma therapist from Texas, was lucky that she could use accrued paid time off when her mother died in 2020 from complications with metastatic breast cancer.

Though her employer at the time was supportive, Cobb noted the mismatch between most employer bereavement policies and employee needs.

“Generous bereavement is an oxymoron and is generally non-existent,” she said. “The most I’ve heard of companies extending is about two to three days max, which tends to be incongruent when experiencing a profound and significant loss.”

The health costs of death

In addition to significant financial impact, 93% of survey respondents reported having experienced at least one health symptom as a consequence of their loss. A majority of respondents experienced at least two symptoms and 34% had four or more symptoms for more than a few months.

Persistent symptoms included anxiety, reported by nearly half (46%) of respondents. Other symptoms included disrupted sleep (38%), weight loss or gain (33%), irritability or anger (30%), and memory impairment (30%).

Women were more likely than men to experience symptoms for a year or longer. For example, 23% of women and just 12% of men reported experiencing anxiety for more than a year. Women were twice as likely as men to experience prolonged sleep disruptions (16% compared to 8%) and weight gain or loss (14% vs. 7%). One in ten (11%) women reported persistent panic attacks compared with 6% of men.

Tennessee-based Brittany Nicole Mendez, 27, a marketing officer at FloridaPanhandle.com, still experiences symptoms associated with loss, seven years after the death of her brother.

Mendez, then 20, was visiting her family in San Francisco for Christmas when she learned her 22-year old brother had been hit by a car while walking on a pedestrian crosswalk. He died the next day.

Though the direct financial burden fell to her parents, who started a GoFundMe to help with the unexpected funeral costs, Mendez didn’t get paid for the extra weeks she spent in California with her family.

The real cost to Mendez has come in the form of lasting mental health challenges.

“I never experienced true anxiety, panic attacks, or depression until after he passed away,” she said.

After her brother’s death, Mendez had difficulty eating and sleeping. She still suffers from extreme panic attacks caused by the fear that she or a loved one will lose their life unexpectedly.

Danielle Jones, 38, of Tampa, Florida, also experiences lingering health impacts of her mother’s death from heart failure in 2021. Jones’ mother died on her 57th birthday.

Jones paid for everything out of pocket, including travel and the process to clear out her mother’s house. She minimized expenses by replacing a funeral with visitation with specific friends and family. Her cousin, who worked for a funeral home, helped out by paying for her mother to be cremated.

But the nonmonetary costs have taken a toll on Jones.

“Her death rocked my world,” she said. “It was hard to go back to work. I cried between work calls.”

Jones started seeing a therapist, but the therapist was disorganized because she herself had just had a death in her own family.

“I quit seeing her,” Jones said. “I couldn’t handle the missed appointments.”

Jones said there were many nights when she could not sleep through the night. She said she only ate if someone reminded her to. Cooking, grocery shopping, and taking walks all reminded Jones of her mother. They would speak daily during these routine activities.

“I couldn’t walk int my kitchen because it made me think of her,” she said. “It was hard to get back to my life as I once knew it.”

Though Jones is a certified nutritionist and wellness strategist who writes about her experience with grief, she said she’s gained 20 pounds since her mother’s death. She blames the emotional stress of her grief.

It may be no wonder that the effects of death can last so long. The process of managing a death can take a lot longer than expected. Resolving all the financial matters associated with a loved one’s death took respondents about a year on average. They spent an average of 20 hours per week dealing with these issues. More than half (62%) said that these issues took longer to complete than they had expected.

Planning can offset the direct and indirect costs of death. Not only does it relieve financial burdens if some expenses have been prepaid, but people whose loved ones pre-planned their funerals reported missing less work and experiencing less anxiety, sleep disruption, and memory impairment. Pre-planning also reduced the likelihood that people would have trouble enjoying everyday activities after they lost their loved one.

Complete Article ↪HERE↩!