We often talk about budgets and saving—habits that influence our current and short-term financial status. As uncomfortable as it may be, we also need to evaluate our worst-case scenario plans, like wills, life insurance, power of attorney, and living wills. With such planning, we can ensure that we’re protecting our families and those we’re closest with from financial stress during difficult times of grief.
Chanel Reynolds is one person advocating that we get our planning done in case something happens. She recently told her story to The New York Times. In the days and months after her husband died suddenly in a biking accident, she spent many hours reassembling her finances and worried that she wouldn’t be able to provide for her family on her own. The will she and her husband had written had never been signed. They had little savings, and she didn’t know all of their account numbers and passwords. Fortunately, his life insurance kept the family afloat while she sorted through everything.
To keep anyone else from having to go through a similar situation, Reynolds created a website of checklists and resources to make the planning process easier. If you haven’t gotten these items together yet, do so—just in case—and keep them updated.
Your will should list your power of attorney (the person(s) who can to make financial decisions for you if you become incompetent or disabled) and describe what you would like done with your assets and property in the event of your death. If you have children, you should also name the person(s) you would like to assume guardianship of yours if necessary.
Make sure your will is signed and notarized. You should also discuss it with anyone who is named in the document and provide them with a copy.
Your living will contains your advance directives for medical care in the event that you are incompetent or disabled; it keeps your family from wondering if they are doing what you would want them to in the event of an emergency. You should designate someone you trust to be your medical power of attorney to ensure your wishes get carried out. Your living will can also describe the type of funeral or memorial service you would like.
As with your will, you should make sure your living will is signed and notarized, and that you have discussed your wishes with those close to you and provided anyone named in the document with a copy of it.
Each person’s insurance needs vary. Many employers provide life insurance, which may be sufficient for some. If you’d like additional options or a second opinion, you can call Consumers or ask your insurance agent. When you start considering all of the expenses your insurance should cover—housing for your family, living expenses, debt, education, retirement—you want to be certain that your policy is more than adequate.
Worst-case scenarios like these are why we recommend establishing an emergency fund that could cover 3-6 months expenses. Knowing that you have a safety net provides great peace of mind during stressful situations. It may take careful budgeting, but it’s easier to plan ahead.
In an emergency, you’ll want to make sure that your survivors and/or power of attorney have the information they need to carry out your wishes. Make a comprehensive list of your account numbers, insurance information, and other necessary personal details so they don’t have to track it down piecemeal. Be sure to store in a safe location!
Have you already completed these difficult planning decisions? Share you advice with our members in the comments below!