Death is a taboo subject for many people, but the fact is we will all pass on one day, so it’s best for you to be prepared now, rather than put it off. The last thing you want is for your family to be caught in debt or be financially unprotected in the event of your death. It can be hard to know where to start planning for the inevitable, but there are many ways to secure your estate so your loved ones are take care of.
Make Sure Your Children Are Covered
Having a child is one of the brightest moments of your life, which is why it’s important to secure their future. Security and care involves deciding who will be their guardian, but also includes how to financially protect them. Besides setting up an inheritance, another significant step you should take is cementing their post-secondary education by buying EE bonds.
EE bonds are a dependable performance bond that is a low-risk, government backed product. When the bond is applied to higher education, the education tax exclusion kicks in, allowing qualified taxpayers to exclude all or part of the interest paid when redeeming bonds issued after 1989. Post-secondary graduates are more hirable and given more opportunities. This is the best legacy you can leave your children, which sets their path on a positive course as they mature.
Control Your Debt
The sad truth is debt lingers even after death. Anything leftover in your estate is used to pay off outstanding debts. The best thing you can do in the present is begin budgeting your income and spending wisely. Come up with a dedicated monthly amount towards your debt, and set up automatic payments for your credit cards, line of credit, or car lease payments.
This method is an effective way to pay down debt and continue with a lifestyle you want. Sometimes you may need a reality check too, are you living within your means? Using credit cards and leasing vehicles can spiral out of control. Always be realistic on what you can afford and manage your debt with a discerning eye.
Create a Detailed Legacy
Many people avoid doing the obvious: completing their wills. A will is the only document that details what happens to your property, who is granted guardianship of your children, and designates your executor — the person who carries out your wishes to completion. Choose an individual that you trust implicitly to be the executor of your will, because they will handle all the delicate issues of your estate, including your finances and assets, any property associated with your estate, or lingering debts that need to be wiped clean. A probate court grants access to your executor after you die, not before.
There are several ways to draw up a will. For instance, if you live in Colorado you should prepare your documents with a Denver will attorney. Having your attorney locally is a great advantage. On the flip side, if your finances are fairly simple, you could always draft your own.. Either way, a will is only legally binding with two signatures from at least two witnesses. A proper will should also be notarized by a notary public.
Don’t Overlook Life Insurance
Another vital piece of financial security that is forgotten frequently is life insurance. This task is usually left to the last minute, and it shouldn’t be. Death is not always a natural occurrence, so life insurance accounts for those other factors.
The insurance market has so many policies in circulation that it’s overwhelming to know what the best one is. Many insurance companies offer what is called whole life insurance. This type of policy is specifically designed for estate planning, caring for your loved one’s financial needs, and allowing access to a cumulative cash value with relative ease. This is the criteria you want in an insurance policy that offers real financial support for your loved ones.
Being prepared for what could happen is smart, there’s no question. But the biggest benefit of dealing with your finances right now instead of later, is knowing you can relax and enjoy your time on earth in a productive, happy way.