Are You Properly Planning For Your Death?

Mortality is one of the few certainties in life, yet so many people find the “idea” of death bitter on the tongue. Admittedly, the idea is unpleasant, but it’s irresponsible to evade estate planning (poor or rich). Plus, you may find it difficult to rest in peace knowing your extended family is arguing in probate court and spending your retirement fund on estate lawsuits while your corpse sits in one of the morgue’s small, cold storage bins until your three children all agree on cremation or a burial service.

That last sentence was a lot to take in, but it’s a highly possible outcome for more than half of Americans. Only 35 to 45 percent of Americans have wills, according to Time Money. In a time reserved for grieving, many loved ones are left with a whirlwind of arguments, courtroom visits, and paperwork, cummatively known as aggravation.

I met with Spanish Fort and Fairhope estate planning lawyers from Caldwell Wenzel & Asthana, P.C. of Alabama to tackle the bitterness with a box of tic tacs and 6 painless steps to make life after loss easier, at least financially.

1. Write a Will: Die without a will and you’ll spend the afterlife haunting probate courtrooms and distant family members claiming they deserve your bonds. It’s called a dying “intestate”, meaning the deceased failed to divvy up their estate and now the state must decide. Generally, the surviving spouse or children will become the beneficiaries, but it’s not always a guarantee. If you have neither, the state picks blood relatives without regard to your wishes or their needs. If this does happen, intestate succession lawyers are the best way to fight for your loved ones wishes. Writing a will is imperative, however, for people with young children. In the eyes of the court, wills are the best way to nominate guardianship for children

2. Life Insurance: You won’t need an attorney’s help for No.2, but it is an essential part of helping your loved ones from the grave. Yes, you could forego this if you’re the richest person in the world, but I’d bet Bill Gates, Donald Trump and Oprah Winfrey all have policies. Not sure how much coverage you need? According to personal finance magazine Kiplinger, the first step is calculating how much it would cost to pay off all debts and estimate your saving goals, like how much you’ll need to send your kids to college. From there, Kiplinger suggests a family may be able to live comfortable on half of your current pre-tax salary. Divide that number by 5 percent to determine how much you need. A reference for the number challenged- $1 million in coverage produces $50,000 of annual income.

3. Name a Power of Attorney & Executor: Your designated power of attorney, legally referred to as your “attorney in fact” or “agent” is able to pay bills, manage investments and takeover any financial decisions if you become incapacitated. Just for clarification, the person doesn’t have to be an actual attorney. This should be someone you trust, but legally they are obligated to act in your best financial interest. An executor, named in your will, is responsible for filing tax returns on behalf of your estate, distributing your property and handling creditors. Pick someone wisely- trustworthy, responsible, and knowledgable on their designated tasks- or hire an attorney.

4. Consider Trusts: Contrary to popular belief, trusts aren’t just for baby millionaires. Trusts let the owner legally decide how and under what conditions their assets are distributed after death, or more simply put, a transfer of ownership. The heirs receive the trust with some serious benefits for all: no probate (like with wills), no fees, no publicity, greater protection from creditors and lawsuits and may allow for reduced estate and gift tax

• 5. Other Beneficiary Forms: While life insurance policies make you assign a beneficiary, this isn’t the case for retirement funds, bank accounts, stocks, or anywhere else your money may be currently taking up residency. The accounts become payable upon death to the named beneficiary, helping loved ones skip the probate courts again.

6. Plan Your Memorial: Cremation or burial? Viewing or no viewing? Funeral home services or your favorite place to hang out? These are important questions to answer before your death so your wishes may be followed and so there are sufficient funds set aside. If cremation is your choice, sign a legal authorization for the service- otherwise, in most states, all children must be contacted and agree. Warning to the prepared: be wary of prepaid funeral plans.

Caldwell Wenzel & Asthana’s lead Fairhope probate attorney, Deepti Asthana, says following these six steps can save loved ones from courtroom dramatics.

“Dealing with probate on your own is tricky.” Asthana said. “You’re in a state of mind where you don’t want to worry about what documents need to be filed in the court, what are the proper steps, what is the court fee, where do I need to go…”

Estate planning helps ensure these issues are resolved before becoming burdens. While you may be in good company with over half of America’s deceased families ending up in probate court, it may not be the smartest company.