Stop Putting off the Estate Plan Conversation
Not enough people have properly crossed their T’s and dotted their I’s when it comes to estate planning. The main reason for this is it is widely seen as taboo to speak about death, especially one’s own demise. So right from the start there are some serious speed bumps keeping people from properly planning for this inevitable life event.
The Conversation Project, a Boston-based non-profit, was on PBS News Hour in March of 2015 discussing their mission to highlight the importance of talking openly about dying. The group has done a lot to help facilitate that conversation. The sad truth is, by not doing talking about it, you can cause a lot of additional strife among your loved ones when you pass. By taking a few simple steps to establish an estate plan, you can make handling your estate less painful for your family.
Questions an Estate Plan Can Answer
Some common questions that arise when a person passes are:
- How should the family assets be distributed?
- Who is responsible for carrying out your last wishes?
- If you end up on life support, do you want to stay on life support or be taken off?
It is unfair to ask the people who love you to make these stressful decisions in the best of times, let alone if a scenario like this is playing out before their eyes.
Three Important Documents
While every estate plan is different, these three documents are usually required:
Updating Beneficiary Forms
Another thing you want to make sure you take care of is updating your beneficiary forms for all of your accounts. One common misconception people have is if they update their will they don’t have to worry about their beneficiary forms. The truth is, your beneficiary designations override a will or trust. This is true for life insurance, annuities and retirement accounts (IRA or 401(k) plan).
If you fail to prepare for your own passing, there are many negative repercussions that could occur. At best, it could cause bickering between family members about who should receive what parts of your estate. At worst, individuals you truly care about and who are relying on part of your estate, could be left without. There have been many instances when a person remarried, but they never updated their beneficiary forms. When they passed away, all of their assets covered by these forms were legally mandated to pass to their former spouse, leaving their current family with nothing. (For related reading, see: The Importance of Updating Retirement Account Beneficiaries.)
A Final Plea
You are more than likely dreading the idea of discussing your own mortality with those you love and care about. This is a very uncomfortable conversation to have, but it is one that is necessary if you want to spare your family additional stress and anxiety during an already difficult time. Fortunately, it isn’t a conversation you usually need to have more than once. Take some time to plan ahead. Create the estate planning documents and set up a time to discuss everything with anyone who needs to know. It might not be a conversation people will thank you for having with them, but it is one you can feel good about, knowing you did your part to protect your loved ones.
(For more from this author, see: Invest in Yourself by Asking for a Raise.)
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