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Recently I lost my grandmother and this made me think about how many Americans are often not prepared financially for their own deaths. Funeral and burial expenses are rising rapidly and without savings or life insurance, it becomes difficult to pay for the funeral and burial. Here is how you can financially prepare for your death.
Creating a Will
If you do not have a will, now is the time to create one. Start by compiling a detailed list of your assets. You should meet with an experienced lawyer or financial advisor to determine the total amount you have in assets. It is also important to name who your beneficiaries are and which assets they will receive upon your death. When creating your will you also want to decide who gets custody of your children should you pass away. Generally most people assign a relative as the executor. However, in some cases you might decide to have a friend or your lawyer act as the executor. You should appoint a power of attorney in the event an illness causes you to not be able to handle your own finances.
Purchase Life Insurance
Because the costs of a funeral and burial are higher than in recent years, it is wise to purchase life insurance. Shop around for the best rates at different insurance companies in your area and compare before making a decision. According to experienced insurance industry experts, the best kind of life insurance is term life insurance. Term life insurance is cheaper than other forms of life insurance. This insurance offers a 20 or 30 year coverage and you are covered for each year you pay the premium. This insurance works well for those with debts or who have kids. If you die, your beneficiaries receive the benefit. The drawback to term life insurance is that it gets expensive as you get older. This is why you need to purchase it while you’re young.
Discuss Your Wishes with Family
This might be a good idea if you know that you don’t have very long to live. Tell your family how you want the funeral to be done. You might want your closest friends to read a few Bible passages at the funeral. Or you may want the choir to sing your favorite hymns. This is also a good time to research different funeral homes and make arrangements ahead of time.
Keep Important Documents Organized
When your documents are not organized, it becomes harder for your family to locate them upon your death. Maintain a file of all of your important documents such as:
· Retirement accounts
· Checking accounts
· Marriage license
· Birth certificate
· Your will
· Life insurance policies
Reduce Debts Now
You won’t be able to pay off all debts before death, but it is wise to pay down as many as possible. This is because upon your death, the executor of your estate will need to sell some of your assets if you have enough to pay off those debts. Use this time to create a realistic debt repayment plan and make adjustments to your budget.
Create a List of Important Contacts
Your family will experience overwhelm while planning your funeral so make things easier for them by giving each member a list of important contacts. These are contacts for people and companies such as:
· Your lawyer
· Primary care doctor
· Funeral home director
· Social Security Administration
· Life insurance company
· Your closest friends
· Your pastor and other church members
Consider Your Kids
You should especially make advanced preparations if you have kids. In your will state who you want to have custody of your children upon your death. You can also decide when your children receive access to any savings or college funds that you set aside for them. This is important because you want to ensure that they have what they need to start their adult lives off right.
Don’t Wait Until You’re Older
If you’re in your 20s, you feel youthful and you don’t think about death. But these days people are dying at younger ages from various health issues so you should prepare now. Purchase life insurance once you’ve been at your job a few years and use this time to build your retirement savings so that you’ll leave fewer financial burdens for the family should you pass away.
In conclusion, when you utilize these strategies, you are on your way to helping your loved ones manage financially upon your departure from this world.