Have you made your end of life plan yet? If not, you’re not alone. Most Americans say they want to do it but far too many of us wait until it’s too late. This series is meant to help you prepare an EOL plan in three simple steps. Within a week or even a weekend you can have a basic EOL plan that delivers the peace of mind you want about the one step in life we all must take. Let’s do this together.
After safeguarding your health by completing an Advance Directive, it’s time to move on to step two of your EOL plan: taking care of your finances and your family by writing a Last Will.
Everyone needs a Will; it’s the one document that states how you want your assets to be distributed if you pass away. Some can be as simple as one sentence: “I give everything to my wife” while others can be extremely complex. Depending how much property, children and assets you have, you may need a lawyer to draw one up for you, but for purposes of this series, let’s assume you’re an average American who can get by using a Last Will that is available for download here: Last Will and Testament Forms Online
What happens if you die without a Will?
Passing away without a valid Will means you do not get to decide how your assets are distributed. A probate court (not you) will decide who gets them. Another downside is the court will appoint an Executor to distribute your property, which means your estate must pay this person every time they go to court on your behalf. The longer the process plays out, which could be up to a year in some cases, the less your beneficiaries receive.
Now that you understand the importance of having a Will, here are some questions you need to ask yourself while you are preparing yours:
Who will be the Executor of your Will?
An Executor is the person you want to be responsible for carrying out your instructions and settling your estate after your death. It’s a good idea to name a primary Executor and a secondary one in case your primary is unable to do it. Once you’ve completed your Will, be sure to tell your Executor(s) where it’s stored.
What are your assets?
Take an inventory of all your assets, write them down and divide them into three categories: physical, financial and digital.
Are large items like your home, property and vehicles as well as small items like jewelry, clothes, furniture and keepsakes. Some people itemize all their property while others make more general lists like, “I give all my furniture to…”
This includes all your cash, bank accounts, stocks, bonds, mutual funds and retirement funds.
If you’re unfamiliar with digital assets, it may help to read our How to Manage Your Digital Assets E-book to learn more. The goal is to list all your online accounts (like bank accounts, social media accounts, retail accounts, photo sharing accounts, PayPal, etc.) in this Digital Assets Spreadsheet.
Since Wills become public domain after your death, do not include any sensitive account information. Instead, appoint someone to be your Digital Executor then tell them where you’re going to store your account and password information.
Who are your beneficiaries and inheritors?
Make a list of everyone you want to receive something. Some people distribute their assets based on who will need the most help when they pass like spouses, children or family member with special needs, while others make posthumous donations to charities.
How will your assets be distributed?
We can’t make the hard decisions for you but the more specific you are in your Will, the less chance there is for misinterpretation among your beneficiaries. If you want two people to share an asset, you can stipulate actual dollar amounts or assign percentages like “my spouse gets 50% and my children 50%.” Other people put conditions into their Will like “if my daughter is still in college at the time of my death, she will receive X amount to cover tuition.”
Who will be the guardians of your (minor) children?
Naming a guardian for young children is very important if you are divorced. Be clear about what you want to happen if the other parent is unable to assume custody. Be sure to talk to the person (or couple) you want to take guardianship of your children to make sure they’re suitable for the job and want to take it on in the event of your passing.
Congratulations, you just completed the second step in your EOL plan. Stay tuned for next week’s story when we will show you how to fill out your Funeral Plan.