The passing of my mother-in-law this past week has started an interesting line of conversation between my husband and I and my parents, siblings, and I. While my mother-in-law's death was unexpected, it was not what I consider untimely. Yet big decisions and plans had not been made in advance causing quite a bit chaos during a time that is already difficult.
We are only in our 30's so our plans in the case of death lie in life insurance. We talked about making more permanent plans, but we really do not have the financial resources for it right now. We have enough insurance to cover the costs (plus cover a loss of income) and the coverage is good for the next 30 years or so. We have a trust set up and as we build assets we have them titled to the trust. We have also put our wishes for our children's guardianships in the trust papers. This week we discussed what we would like to happen if we die. Morbid, maybe. But now we know!
My dad is planning to retire in the next year and he and mom have determined to make their arrangements and plans when he retires. They are at an age where they have the financial resources to plan ahead and where life insurance is not worth the cost. My mom dealt with the death of her mother 10 years ago. My grandfather bought cemetery plots for him, his wife, and a handicapped child years in advance. Funerals were pre-paid -- you can pay for your own service years in advance (who knew??) or in their case, the funeral company invested money for them and made enough to cover all expenses.
I guess my point is this: this is an area of life you can plan for. Ten out of ten people die so there is a good chance you and I will, too! The conversations may not be easy, but after this week, I would say they are worth having. Just a suggestion and observation after a few long days.
Sunday, June 22, 2008
Planning Ahead
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Due to our friends' loss of their infant son and imagining how difficult it must have been to make decisions (funeral, burial,etc) that were totally unexpected and trying to accept the loss at the same time, we have been having similar conversations. We have also talked about obituaries and the necessary information that we might THINK we know. We have decided to make up a questionairre to have all of our parents fill out while they are of sound mind and body so we have that all taken care of, at least.
One word of caution in relation to pre-paying services, though. I read an article in AARP recently about the hundreds of thousands of people who think they have this all taken care of and then their spouse dies and they learn that the money they paid is gone and no good. Some funeral homes were just stealing the money which is another matter all in its own but others paid 30 years previous and that money was no longer sufficient to cover the current costs. It was very sad to read about, really. So my two cents would be set aside the money for sure but don't pay it until needed.
the end. :)
Yeah I was thinking you could just put the money in a money market account and let it sit there earning interest. Low risk, but your money still grows. And if you have a trust, you could name the account in the trust, which shields it from estate issues.
In my grandparents case, it was in a smallish town (Jackson) with a funeral home that had been around forever. But I would be concerned about the funeral home going out business and taking my money with it!
I've seen stats which show how few families have drawn up wills/guardianship papers. This is dangerous because you can't assume the government is going to pass on your money the way you'd want or give your children to people you'd want.
In some states, you can draw it up on your own (called "holographic"). If something like that does go to probate, wishes of the deceased can be submitted in to evidence to help the court decide what to do. So even writing something down is better than nothing! I'd still suggest a trust because even wills can be contested in court -- his and her families can fight over who gets the kids despite what the will says!
I think people tend to NOT think about this because it is morbid in their eyes. Being in insurance I've come to realize it's not morbid but very much necessary to make plans.
Since I was about 24 I have had life insurance, and made specific plans for if something were to happen. Letters to my family, a will, etc. I have them all put away in my safe and my mother and sister know where they are in case something were to happen.
One thing you have to think about is also making sure that people know where your simple checking and savings accounts are as well. Because if you don't have someone else on your account and they don't know where your debit cards are or other things, they can't get the money out or it goes into probate. So, I've written down all account numbers, banks, where cards are located and what the pin numbers are in case something happens.
Good luck. It's not morbid. It's planning and that's OK. Especially when you have kids.
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