Preparing for the death of a loved one
Due to the unpleasant subject matter of death, people often neglect to financially prepare for the loss of a spouse, family member or loved one. It is wise for couples to plan for the worst so that in the event one spouse dies, the other will be able to grieve without having to be concerned with becoming indigent. There are a number of steps you can take to ensure that you are prepared for the loss of your spouse or loved one.
Make certain that all of your important documents are organized and updated. These include life insurance policies, wills, property deeds, bank accounts and investments, and car titles. You should also have a revocable living trust, which will help ensure that your assets will go to the beneficiaries of your choice. Otherwise, the state will decide who will inherit your assets. Consider the case of a mother of two young children whose husband died suddenly. He did not leave a will or a revocable living trust, and under the law of the state where he resided, 50 percent of his assets were to go to his wife, and 50 percent were to go to the children. However, because the children were young, the funds were deposited into an account that was controlled by the court. The mother had no access to the account. The mother had to request permission from the court to be designated her children’s guardian, and to use the funds.
It is also recommended that you compile a list of passwords for online accounts, including bank accounts, 401(k)s and investment accounts. Be sure to keep the list in a safe place that is known to both spouses and possibly adult children. The importance of financial planning cannot be emphasized too strongly, particularly as couples and parents become advanced in age. According to Forbes Personal Finance, transfers of wealth are unsuccessful approximately 70 percent of the time. This means that the following generation unintentionally loses control of their assets.
Many elderly widows who never had to manage personal finances can be overwhelmed by the sudden responsibility of making financial decisions, particularly if they suffer from dementia. For this reason, it is very important to have a conversation about financing, to engage in financial planning and to designate a durable power of attorney well in advance of the time at which one might be needed.
In many instances, relationships among family members have been ruined when the transfers of homes, investment accounts or family heirlooms have been incorrectly deeded or designated. Such an eventuality can be avoided by careful and meticulous planning and preparation for the inevitable demise of a spouse, parent or other loved one.