First, allow me to give honor where honor is due. This post was inspired by Qantas Airlines as we took off from Brisbane, Australia. On the take off, we had a lot of turbulence, and for a moment I wondered if I had all my personal affairs in order.
Death is a reality. The only mystery is the time and the place.
Each person will make decisions today that impact what is left undone at their death. While this might seem like a morbid topic, this is an essential conversation for couples to have. At death, far too many people leave a heavy emotional burden and financial burden on their families. Show love to your family by taking care of any uncompleted financial tasks.
1. Compile Important Paperwork into One Location
Since I subscribe to many blogs via email, I get a lot of emails every day – over 100. My wife and I share email accounts, so she is forced to endure all those blog posts. However, I noticed that a certain post lingered in her inbox – it was called My Love File written by Joe Plemon. In that post, Joe talked about the importance of compiling all your crucial paperwork into one file. (Similar to Bob’s FLOP file)
The fact that this post remained in her inbox was a way of communicating that a ‘love file’ is important to her. My wife and I have discussed the fact that she needs a central location where she can access all pertinent information like:
- Current credit card accounts
- Open bank accounts – be sure to organize your bank accounts
- Existence of life insurance policies
- Location of our will
2. Complete a Will
People often note that since they don’t have a lot of money, they don’t need a will. This is completely untrue. It needs to be on your personal financial checklist. A will does a lot more than distribute your wealth. It determines important issues like guardianship for your children. In the unfortunate case that a husband and wife might die simultaneously, the court will need to assign the guardianship of your kids. If you have made arrangements via a will, you can be sure the people you select will lovingly raise your kids.
In the will you can also put financial stipulations in place for inheritances to your kids. This includes dictating what they should receive and when they should receive those funds.
3. Get Life Insurance
Dave Ramsey suggests your best bet is to try and get 10 times your annual income on both the husband and wife. Since we live overseas, our life insurance options are limited (and expensive). Each of you should do some homework to answer the question, how much life insurance do you need?
Term life insurance is the cheapest way to purchase life insurance. Even if your spouse is a stay a home worker, they should be insured because someone will need to stay home with the kids.
If you’ve ever heard a story about a young mother whose husband died without insurance, you’ll wait about five seconds before getting your life insurance (get a life insurance quote)in place. Your spouse will have so many other things to deal with during a loss. Please don’t put financial pressure on them as well.
Do not pass go. Do not collect $200. If you are married and have kids, get life insurance today.
4. Save Money for Kids’ College
I’d say this one is just icing on the cake. If you are in a place where you can save for your kids’ college, that would be a loving thing to do. Kids who endure the death of a parent will have a tremendous amount of emotional pain. That pain will be increased if your kids feel penalized (like no money for college) because of a difficult financial situation at home. Saving money for college should come after becoming debt free. Saving for college in a Roth IRA can be a good option because it can be used for either retirement or college bills. Other options include the 529 plan and ESA.
Bonus: Talk about Your Personal Wishes
You might be dead, but someone still has to deal with your body (it doesn’t just evaporate). In our case, we live overseas, and my wife and I are from different countries. It has been important for us to talk openly about where we each want to be buried. During the process, you might find out if there are any family burial traditions – like generations getting buried at a certain cemetery. How important is that to you, to your spouse, to your extended family? If you decide to ‘break the tradition’, communicate that to your extended family so they won’t burden your spouse.
For a Christian death is the ultimate irony – a mixture of sadness and joy. By completing these important tasks, you ease the grieving should God call you home before anyone expects.
Photo by kjunstorm