They say the only two things you can’t avoid in life are death and taxes. I’ve written a lot about taxes lately, but one subject I haven’t yet touched on is preparing for your own passing and that of your significant other.
It’s a sensitive topic to be sure, and perhaps that’s why so many people avoid it. But since we all never know which day will be our last, it’s key to have one’s estate planning in order. And the recent sudden death of a friend’s spouse made me realize just how important this is. So now that tax season is over, here’s a quick checklist of some important steps to consider when preparing for the worst.
Craft, or Update, a Will: In a will, you detail who will inherit your property and care for your young children, if you have them, in the event that something happens to you or your significant other. If you haven’t yet written a will, you’re letting state law make these important decisions for you and what the state decides may not line up with what you’d want, or what’s best for your family.
Even though I do my own taxes, I would never consider doing my own will. Why? If I screw up my taxes, I can fix them, but the same is not true for a will. Still, for die-hard do-it-yourselfers, here are some resources to help you get started writing a will. Legal information publisher Nolo has some helpful pieces on its site including information on what kind of will you’ll need (e.g. is a basic one enough?) and what to include in your will, as well as a tool to help you complete your will online.
If you already have a will (or an estate plan for that matter), take some time to reread and update it, especially if your life circumstances have changed since you first wrote the will. The Pilot and I, for instance, first created our will when we had young children and it mostly dealt with who would watch them if both of us passed away. Since then, we’ve had to update our will to reflect that both of our daughters are now adults. Other life changes that may warrant will updating include a divorce and a remarriage. And one last piece of will-related wisdom: be sure to discuss your will plans with your inheritors before you pass to help prevent future family strife.
Consult with an Estate Attorney: If you expect to die with assets that will be subject to estate taxes, if you have a complicated inheritance plan or if you’re not sure you want to write a will yourself, it’s a good idea to have a lawyer help you craft your will. The tax consequences of passing away can be very dramatic and it’s easier to mitigate at least some of those consequences with the right legal guidance. It’s also just a simply a smart idea to consult with a lawyer in general as he or she can help you with aspects of your estate planning beyond your will including helping you set up a trust, figure out life insurance and optimize charitable contributions, among other tasks.
Check Your Account Beneficiaries: Just as it’s important to make sure your will is up to date, it’s also important to ensure that the beneficiaries you have listed on everything from 401(k) plans to investment accounts to life insurance policies are current.
Read Other Helpful Resources: The advice above is just the tip of the iceberg when it comes to preparing for passing. There are other steps you’ll want to consider including making sure you have adequate life insurance, set aside money to cover funeral expenses and write medical directives. With the government now recommending people create social-media wills, you may also even want to manage what happens to your online presence after you die.
Thankfully, there are a number of online resources that can help you can gain a better sense for the full spectrum of what planning for passing entails. Here are just a few resources worth reading as you get started: this guide from Nolo on “12 Simple Steps to an Estate Plan” this helpful article on estate planning for every age and this run through of getting your estate in order “before you punch out.”
Thinking about this subject is never fun, but having these matters in order provides peace of mind. After making a few updates to my own estate plan, I can forget about it for awhile and go back to enjoying life!
