End Of Life Finances – What You Need To Know

Don't Leave Financial Chaos Behind

It can be difficult to consider, but if something awful suddenly happened to you, your family would be left to manage your financial affairs. Having them well organized will help make this tough time a little easier to handle for those left behind.

It's important to make sure that all of your important documents are stored safely in a location that is easily accessible to your loved ones. They'll need to be able to determine what assets and insurance you have, and gain access to the information they need to obtain your life insurance.

There are several basic steps you can take so that your family and loved ones are well-protected.

  • Evaluate Your Bank Accounts and Assets
  • Review Life Insurance
  • Include Your Partner in Financial Choices
  • Keep Your Will Updated
  • Keep Vital Documents Safe


Evaluate Your Bank Accounts and Assets

Can your partner or close family access your bank accounts when you die? If you don't know, it's important to check with your bank.

Find out how your family will access funds after your death if your accounts are in your name only. Will you need to set up an emergency fund in a joint account to cover things like funeral expenses?

Go over your assets one at a time and determine which ones pass directly to your beneficiaries and which ones will first need to go through an estate. If you and your partner own something together jointly, it should automatically transfer to your partner when you die. However, if you own property that is in your name only, it will become an estate asset and it will need to be handled in your will.

Review Life Insurance

If there are individuals in your life who depend on you for support, like a dependent partner or child, life insurance is a good way to be sure that their financial needs are taken care of if something happens to you.

A life insurance policy typically pays out a lump sum to your beneficiaries after you die. This money can then be used to pay off your mortgage debt, other personal debt, or for income for your dependents.

You may also want to consider purchasing disability insurance, which will pay out a lump sum if you are totally disabled. In this case, you could have high health care costs while also losing your income.

Life Insurance Beneficiaries
Review the beneficiaries that you originally set up for your life insurance policies, especially if you and your partner have separated, they've passed away, or your children are now adults.

Be sure that you understand how taxes may impact your beneficiaries. It's possible that a policy could payout to a spouse without taxes, but be taxable if it passes on to your adult children.

Include Your Partner in Financial Choices

If your partner isn't usually involved with the financial situation, do your best to get them involved as you age. Introduce them to the financial professionals that you work with to manage your family's affairs.

If something sudden happened, it'd be important that your partner know who manages your assets and liabilities and how to access them.

Consider gathering detailed instructions on how they can access any assets that are joint, such as banking and investment accounts. Store this information in a secure location.

Keep Your Will Updated

Being sure you have a valid will can help make sure that your assets go where you'd like them to in the event of your death. You should also consider granting an enduring power of attorney to someone that you trust, so that they can manage your affairs if you lose the ability to do so.

Review your will and powers of attorney regularly, and make sure to review them each time your overall circumstances change. Be aware of life events that could invalidate your will - for example, a marriage or divorce could change the situation.

Legal Guardianship for Children
Your will has details of who will become the guardian for your dependent children if something happens to you, as well. This will usually be an individual that you feel can rais your children with the values you prefer, as well as someone who is emotionally and financially capable of doing so.

Setting up a trust
If you have many assets or if your family structure is complex, you may need to utilize a trust to hold your assets. A family trust can be created while you are still alive, while a testamentary trust is created by instructions that you leave in your will.

Have an attorney review your estate plan and trust to be sure they are legally binding and valid.

Keep Vital Documents Safe

To be sure that the person who will be managing your estate can find all of your financial information, set up a single file that lists out your insurance policies, assets, debts, and other financial details.

Include details like:

  • Financial institution, account number, and name on the account
  • Policy provider, number, and dates the policy begins and expires
  • Additional information that may be necessary to access the account

Keep the most recent account statement for each of these documents in this file.

Keep both a hard copy and an electronic copy of the file. Store the electronic copy securely, and keep the hard copy in a locked filing cabinet or safe deposit box.

Avoid leaving behind financial chaos when you die. Instead, create a plan and spend time getting your paperwork in order so that the process is easy for your loved ones to manage after you've passed away.