Nobody wants to imagine dying or becoming severely disabled, but it is important to plan these opportunities from a financial perspective.
When you are happy with your finances and have saved a sufficient amount for retirement, you probably believe that you have all of your financial ducks in a row. However, if you do not financially plan the financial end of your life, you may put your loved ones, heirs, and finances at risk.
If you’re not well prepared financially when it comes to end-of-life or disability agreements, read on. We’ve outlined five key steps you can take to get your financial ducks in a row.
Please note that some of these documents have to be notarized. Ask a lawyer for details about these documents and parameters.
1. Write down a last will and will.
A surprising 6 in 10 Americans have neither prepared a will nor a living trust, according to a new poll from Caring.com. However, of the roughly 40% who have a will, most are older adults Almost half of Americans over 55 don’t. Only 22% of Millennials and Gen Z adults (18-36 years old) have this important document.
That’s true! If you are a young adult with assets, you must have a will too. How do your family members or important others know how to distribute your wealth without one?
Having a will is especially important when you have children. In the event of your death or disability that prevents you from looking after your children, you must specify who you want to be the guardian of your children.
2. Authorize someone you trust.
A power of attorney gives someone else the power to act on your behalf in the event that you are unable to work. Giving this document to someone will help you make legal decisions about your property, finances, and medical treatment if you are unable to do so.
3. Provide a loved one with the passwords for your accounts.
This is information that many of us never think of, and it is important. In this digital age, much of our vital information is locked online, including our banking information. Share your bank account password with someone who can access your finances in the event of your death or disability.
4. Choose the executor.
The appointment of the executor is one of the most important tasks involved in creating a thorough and useful will. An executor is someone who is responsible for fulfilling your final wishes, which are set out in your will after your death. Having a good executor minimizes family friction and confusion.
The tasks of an executor include:
- Inventory of your estate
- Filing the final income tax return
- Notifying banks and government agencies of your death
- Distribution of assets to your beneficiaries
There are a few important points to consider when appointing an executor:
- Choose someone in good financial and legal standing.
- If you don’t have a spouse or family member to appoint, ask a trusted friend who is in good health, or you could appoint a bank or trust company.
- If you are choosing someone who lives in a different state, check the laws of both states to make sure the executors do not have to be family members or beneficiaries.
5. Prepare a DNR (Do Not Resuscitate) order.
If you wish, prepare a DNR or do not revive the document in case you need or want it. A DNR is a written or oral medical order that instructs healthcare professionals not to perform CPR on you if your breathing or heartbeat stops.
The decision to give your medical team a DNR mandate is a difficult one. It is usually made by people preparing for life-threatening surgery or near the end of their lives and suffering from a disease that does not get better.
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