Looking to the (Financial) Future

As many recent high profile deaths has reminded us, no one—famous or not—lives forever. It is important to provide for your family so that they can continue to live successfully and happily even after you are gone.

First, be sure that you are properly insured. However, you do not want to be misled by an untrustworthy company with a good advertising strategy. Know the credit worthiness of the company. Also, have the right amount of insurance. It’s just like Goldilocks and the three bears—you shouldn’t have too much or too little, you should have what’s just right for you. Types of insurance to consider include life, health, disability, long-term care, liability, property, and casualty.

Also, be educated about estate planning and wills. Currently, if your estate is worth less than $3.5 million, your family will not have to pay estate taxes after your death (this will change in 2011; then, if your estate is greater than $1 million, your descendants will have to pay estate taxes).

A will directs the flow of your assets and establishes a guardian for any minor children and property and an executor. In a will, you can establish a trust that tells your family what you want to happen with your property, assets, and money. A living will describes acceptable medical procedures, should you be unable to communicate with your healthcare providers due to accident or injury. A living will also allows you to appoint a healthcare proxy to speak in your stead. You can also designate someone to have power of attorney and handle your legal and business needs should you be unable to do so. Wills, living wills, and so on should be updated every three to five years, just to keep things current and clear to anyone reading your documents.

Also, consider arranging and preparing your official documents. It’s often difficult for other people to try to gather and make sense of your personal documents. If you do it for them, not only will you have a neat and orderly filing system during your life but your family will also have the same system after your death.

While this type of event isn’t anyone’s favorite thing to think about, being prepared can allow families to mourn the passing of a loved one with having to worry about the financial end of things.