How Finances Change How We Think About Death

Finances can change how we think about death. Plan for your own future passing and you won’t place unwanted financial burdens on your loved ones.

Preparing financially for your death is a way to relieve some hardships from your family as they are in the grieving phase. Unfortunately, death can change the way we view finances. While it’s a morbid thought, it’s best to get your affairs in order before you pass.

Name financial and medical power of attorneys (POAs)

Retirement and estate planners recommend naming power of attorneys over your financial and medical affairs as you age, in addition to when you pass. This will help with tension from family members when it is clearly laid out who the POA is.

Create a will

A will needs to be a valid legal document that you can make either yourself or, more advisably, with an estate attorney. You’ll want to consider a handful of things when you make your will:

• Name a guardian - If you have children who are under 18 years old, then you must have a will and it needs to name a guardian for them. Without a will, the court will be forced to get involved and name a guardian. This is a very large decision, so it’s one that should be made by you and not the courts.
  
• Find an executor - An executor is someone who carries out your will. This person will deal with all of your accounts, etc. after your death. Executors pay taxes and debts, will close your accounts, and go about distributing the items in your will. Many people choose a relative, but a financial advisor is not uncommon. An advisor will be familiar with the ins and outs of wills, so there will be less room for error if they handle it.
  
• Your will can be handwritten, however, you will need to make sure that it contains critical information like your signature, date signed, address, and beneficiaries. If you decide to go the handwritten route, then you should see an attorney or financial advisor to ensure your will is valid.

Get life insurance coverage

Life insurance is a helpful way to ensure that your loved ones will not be burdened financially after you pass. If you have debts that would fall onto someone else in your family to take care of, life insurance is a must to relieve them of that burden.

In general, term life insurance is enough for most Americans. This type of insurance lets you buy coverage that will last as long as your family members would financially rely on you. The goal of the end of this insurance is that your loved ones—usually a spouse or children—won’t need your financial support once coverage ends.

Spare your family the burden of funeral costs

Meet with a financial advisor to help you fund the costs of a funeral and how much life insurance will cover.

Additional funeral planning tips:

• Make a plan of funeral preferences
• Save funds dedicated to funeral expenses
• Shop around in advance. Compare prices from multiple places and remember that you can supply your own casket or urn.
• Ask for a price list. The law requires funeral homes to give you written price lists for products and services.
• Avoid emotional overspending. Resist pressure to buy goods and services you don’t really want or need. It’s not necessary to have the most expensive casket or have the most elaborate funeral for you or loved ones.
• Recognize your rights. Laws regarding funerals and burials vary from state to state. It’s a smart move to know which goods or services the law requires you to purchase and which are optional.
• Apply the same shopping techniques you use for other major purchases. You can cut costs by limiting the viewing to one day or one hour before the funeral, and by dressing your loved one in a favorite outfit instead of costly burial clothing.
• Shop in advance. It allows you to comparison shop without time constraints, creates an opportunity for family discussion, and lifts some of the burden from your family.

Planning now will save heartbreak later

Finances change the way we think about death due to the fact that we don’t want to place unfair financial burdens on our loved ones when we pass. Creating a will, establishing power of attorneys, creating a will, and saving for funeral costs will let your family grieve without thinking about financial hardship.

Related Articles:

• Estate Planning Procrastination Can Cost You Thousands
• Social Security Death Benefits
• How to Talk to Adult Children About Your Estate Plans
• Everything You Need to Know About Making a Will