15 Things That Are Vital to Have in Order Before You Die
Death is not something you want to think about nor something easy to prepare for. However, for parents or grandparents with loved ones to support, it’s crucial to manage a few things before you die. Here are 15 vital things to have in order to make the burden on your family as light as possible.
Write your will
A will is essentially a document that says who gets what when you die. After death, you will likely have left behind assets, including money, homes, cars, etc. And your will designates who receives those assets. If you don’t create a will, it could lead to serious family disputes over who thinks they are entitled to those assets. If you don’t have a will, the state gets involved and distributes the assets based on its own laws.
Next: Just writing the will isn’t enough.
Review and update your will
While making a will is a good first step, you need to keep up with it. As years pass, you may acquire more assets or other people may come into your life who weren’t once there. As a result, you need to continue updating your will to make sure it is as current as possible when you pass. It’s recommended that you review your will every five years. However, that is the minimum — if a big life change occurs, review it sooner.
Next: This is another type of will you’ll want to have.
Write a living will
Unfortunately, medical conditions can happen where you may become incapacitated or incapable of expressing your desires regarding medical treatment. For this reason, you should always have a living will. It is a direct expression of what you would prefer happens should you be put on life support. It’s important to note that a living will is different from a DNR (do not resuscitate). A DNR is a medical document that must be signed by your doctor; a living will is a legal document and requires no physician approval.
Next: Meeting with a professional can help get everything in order.
Meet with a financial planner
The best way to make sure your finances are in order is to hire a financial planner. He or she may point out less obvious things that you could do to plan for your death, which you may not have thought of yourself. Plus, you may assume you’ve done everything you can do to plan, but a financial planner might remind you of something important you haven’t done. It’s always best to get a second opinion to make sure you have all your ducks in a row.
Next: It’s imperative you create this list.
Put together an assets list
Investopedia recommends putting together both a physical and non-physical assets list. Go through your home and figure out anything that’s worth more than $100 (furniture, jewelry, etc.). Then, make a list of anything non-physical, including your 401k, any life insurance policies, etc. These will help you know your worth, and it can help you and your financial planner put the best plan in place for after you pass.
Next: Along with assets, this is also a very important list.
Put together a debts list
It’s important to go through the money you owe to help figure out how much you’re actually worth. Any type of loan, including credit cards, mortgages, auto loans, etc. should be considered when figuring out your debts. You should also run a free credit report at least once per year. You can use a website, such as Credit Karma, to help find any hidden debts you may have forgotten to pay off.
Next: You may not ever need one of these, but you should have one chosen just in case.
Select a power of attorney
The power of attorney is essentially the decision maker for a person who has become incapable of making serious decisions. It is common for old people to make someone their power of attorney when their memory starts to fade or they can’t think as sharply as they used to. The power of attorney then oversees major decisions involving that person’s finances and legal matters. But whomever appoints someone to be their power of attorney can also revoke it, provided they still have a capable mind.
Next: You’ll need to choose one of these, too.
Select an estate administrator
An estate administrator should not be confused with a power of attorney. Estate administrators have the responsibility of settling an estate. This means they’re the ones who distribute everything after you’ve passed, whereas the power of attorney makes financial decisions while you’re still alive. A power of attorney might not always be used (if your decision making skills never dwindle), but an estate administrator is necessary.
Next: These people should have a copy of your assets list.
Give your assets list to your estate administrator and/or spouse
You need to think long and hard about who would be the best person to divvy up your estate when you pass. In some cases, it’s your spouse, but not always. Regardless, make sure you give your list of physical and non-physical assets to the estate administrator, so he or she knows what they’ll be handling when you pass. You should date and sign your assets list before giving it to your administrator. Also give a copy to your spouse. Keep a third copy for yourself, and make sure everyone stores the list in a safe place.
Next: And this person needs a copy of your will.
Give a copy of your will to your estate administrator
Your estate administrator also needs a copy of your will. He or she must follow the will when dividing up the estate. It will also make the administrator’s job much easier if the will is up to date. You should make a few copies of your will, and make sure the right people have a copy. Your estate administrator, your spouse, and you all need to keep a copy in a safe place, similar to the assets list.
Next: It would help for you to designate at least one of these.
Designate a beneficiary
The beneficiaries are those who receive a percentage of your estate when you die. You may have one or more beneficiary for your estate, which is fine. But you need to designate who gets a piece of your estate when you pass. This keeps things simple when you pass and prevents others from coming forward and claiming they should get part of your estate. The primary beneficiaries inherit first, followed by secondary or contingent beneficiaries. (These beneficiaries typically only inherit if the primary beneficiaries also die). You must give names and a percentage when choosing your beneficiaries.
It’s important to note that your will cannot override beneficiaries. That’s why you must always make sure your decisions are up to date and align with one another.
Next: Make a list of these — it could help out your beneficiaries.
Make a charitable organizations list
You should make a list of any organizations to which you donate. Organizations sometimes offer accidental life insurance benefits if you’ve donated for a long time. Plus, making a list of charities lets your beneficiaries know the charities you care about most. It’s not uncommon to leave some money to charity when you pass.
Next: Make sure this is up to date.
Update your life insurance policy
It’s so important to have an updated life insurance policy when you pass. Things can change throughout life, so the life insurance policy you had when you first started a family may be long overdue for an update when you’re older. Plus, it’s important to make sure all of the proper beneficiaries are listed and that the amount is enough to keep those around you comfortable if you were the primary income in your family.
Next: Do this to prevent your bank accounts from being probated.
Assign a ‘transfer of death’ designation
When you die, your accounts are probated (distributed through a legal process). But if you assign a TOD (transfer of death), then upon your death, your accounts will be immediately transferred to your beneficiaries and won’t need to be involved in the probate. You’ll need to provide an original death certificate of the account holder, but that should be all you need to transfer the account. It makes things much easier than having to go through the legal process of distribution.
Next: Make these as simple as possible.
Simplify your finances
Make sure you have all of your finances in order. You may have opened several different accounts over the years, and you likely don’t need all of them. Simplify your accounts as much as you can to make everything easier when you pass. Investopedia suggests also combining any IRA accounts you may have opened through the years, plus closing any 401k plans you may have started with past employers many years ago.
Check out The Cheat Sheet on Facebook!