There are so many things to think about when it comes to planning for the end of your life, but financial planning isn’t usually at the top of that list. In fact, it may be somewhere near the bottom.
That said, one of the biggest issues that your loved ones may have to deal with after you’re gone is how they manage your money and assets, as well as what happens to those assets after they have been distributed to those closest to you. Use the following guide to make sure your finances are in order before you die.
1. Itemize the Inventory List
Make sure itemizing your inventory list is part of your end of life planning checklist. This will enable your family members to deal with your estate more quickly and easily. Create a computer file of each item with its serial number (if applicable), purchase date, current resale value, and personal/sentimental value. This will save time for those who come after you and it may spare them some heartache as well.
2. Pay off Any Credit Card Debt
Credit card debt is difficult to pay off when you have a low income, but paying it off is vital in order to put your loved one in a better financial position in the future after you pass. If it’s a big balance on a business loan or charge card, for example, it will be difficult for your heirs to pay off if they can’t sell or transfer ownership of another asset such as real estate, stocks or bonds. If you’re able to pay it off before things get too serious, that’s one less stressor for your family to deal with when you pass away.
3. Create a Will
Make sure that your loved ones are provided for by creating a will. A will ensures that your possessions are distributed according to your wishes after you pass away. If you don’t have a will, state law will dictate how your property is divided—often not according to what you would choose. A lawyer can help you make sure that you’re protecting yourself and those who matter most to you.
4. Buy Term Life Insurance
It can be tough to think about, but if you want your loved ones to avoid financial hardship after you die, it’s essential to make sure you have enough life insurance. That way, if something unexpected happens, your family won’t find itself struggling to pay medical bills or cover everyday expenses.
5. Review All Retirement Accounts
Reviewing your retirement accounts is a straightforward way to make sure you’re on track for your future. If you haven’t been to your investment account in a while, take some time today to check it out. Look at each of your investments and make sure they reflect what you had planned when you first opened up that account.
6. Designate Who Will Handle the Financial Affairs If You Become Incapacitated
It’s important to identify a power of attorney, also known as an agent or attorney-in-fact, who can legally make decisions on your behalf if you become incapacitated. With that person in place, you don’t have to worry about whether someone will be able to handle things like paying your bills and filing taxes.
7. Understand Social Security Administration Benefits
If you’re 62 or older, Social Security benefits may be one of your primary sources of income. Be sure to understand your rights and limitations so that you can maximize these benefits while adhering to all state and federal laws. This includes understanding how much money is coming in each month, when your benefit payments will begin, and how you can modify or end a specific payment option should you pass.
End-of-life planning can seem like one of the scariest things to think about, but it’s an essential step for everyone. Planning your end-of-life arrangements doesn’t mean you’re giving up; it means you’re accepting what will happen to you when you die and taking steps to make sure everything runs smoothly when the time comes. Let this guide inspired by GoodTrust help you to start getting your affairs in order.