My husband’s family is Irish and I often feel luckier in March because of it. I feel in my bones that their Irish luck will rub off on me and I will somehow find my pot-of-gold. Or maybe just win a Final Four pool. Either way, those leprechauns got me thinking about how often we say the word “lucky.” I’m so lucky. Our family is lucky. And so on and so forth.
When I think about luck, however, I realize that planning for life is much better than just leaving everything to chance (or a leprechaun). We are lucky that our state and federal statutes allow us the opportunity to plan for and protect our families when we die. And we all will die. No one is that lucky.
So, how can you plan instead of leaving your family’s well-being to chance? Here are seven easy steps to take.
Update beneficiary forms.
A beneficiary form instructs an institution where to distribute money at your death. Many people forget to update beneficiary forms on their IRA’s, pension plans, or life insurance after a family death or divorce. If a form fails because it was not executed properly, the beneficiary dies before you, or by operation of law, that asset will have to go through the probate process. Request a copy of your forms and update your beneficiaries if need. Keep an up-to-date copy with your important papers.
Put a POD or TOD on your bank and brokerage accounts.
A Payable on Death (POD) or Transfer on Death (TOD) form can be filled out for your bank and brokerage accounts. These forms also instruct an institution where to distribute money at your death. Many financial institutions, especially banks, do not proactively offer POD or TOD options when you set up your account. You need to ask. I recently had to open a probate for a widow because her husband’s checking account did not have a POD or TOD designation.
Purchase life insurance.
I’ve heard all the arguments about life insurance and that it is just a waste of money. Really? Life insurance is not for you. It is for your family. Does your family have immediate access to money to pay for your funeral? Or enough money saved to make up for your lost wages for the next five years? If you are a stay-at-home parent, does your spouse have the funds to pay for daycare or afterschool care if something happens to you? My dad died when I was 19 and “luckily” his life insurance helped me finish college. But it wasn’t luck. It was lucky my dad planned ahead to protect me.
Pre-plan your funeral.
On Black Friday this past year my husband and I sat down with Leah Gumm at Mountainside Funeral Home in Queen Creek to pre-plan our cremation services. That might sound creepy, but it wasn’t. We absolutely know we will need these services one day. Not only did we lock in 2013 prices, but statistics show that burial services for people who do not pre-plan cost 2-3 times more because their family is buying on emotion. Not only did we get great pricing, but we are protecting our family from having to make really difficult decisions when they are extremely emotional and compromised.
Choose a guardian for your minor children.
It is heart-breaking to me that parents will spend thousands of dollars on baby items, birthday parties, and children’s clothing, and will not spend $300 to have an estate planning attorney draft a comprehensive Will that names who will raise their children if something should happen. You are not protecting your children by leaving that decision to chance. Go on a date with your spouse and make that decision. You can always change it later.
Create a Revocable Living Trust.
An estate plan that includes a comprehensive Revocable Living Trust provides you and your family the most protection. A properly funded trust can ensure your family will not have to go through the expensive and timely probate, can provide incapacity planning during your lifetime, and can provide asset protection to your beneficiaries at your death.
Talk to your family.
When you take these steps, remember to tell your family. All the pre-planning in the world does no good if surviving family members cannot find the proper documents or do not know your wishes. Invite your loved ones over for dinner, or set up a Skype conversation. It may be difficult, but I guarantee you will have peace of mind knowing you took the steps to protect your family.
“Shallow men believe in luck or in circumstance. Strong men believe in cause and effect.”
― Ralph Waldo Emerson
