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By Dr. Keisha Chambers
Faculty Member, Business Administration, American Public University
As I get older, I realize the things our elders used to say are true, such as “time waits for no one.” Last fall, I lost yet another high school classmate. Maria died in her sleep from a leaking heart valve she had known about for years. Ironically, the week Maria died, she was scheduled to visit her doctor to get the valve surgically repaired but she “just ran out of time.”
Maria had two young girls, ages 14 and 9. But she had no close family and no will outlining her final wishes for her children.
As a result, they were in jeopardy of becoming wards of the court. Not only was there no will, there also was no life insurance policy to pay off her existing debts or assist in caring for these two young girls. The girls ended up being split up. The younger went to a distant, unstable aunt and the older went to the godmother who cared for her as a child.
Could this have been prevented? Of course. Is this the outcome Maria would have wanted for her children? Of course not.
We insure our cars, our homes and even jewelry and expensive possessions, not knowing if a claim will ever be filed. There are a lot of things in life we do have control over, but our death is not one of them. We simply do not know when our time is up.
Get Your Financial Matters in Order and Create a Comprehensive Estate Plan
In past articles, I have expressed my passion to educate on the importance of not only getting your financial matters in order, but also creating a comprehensive estate plan.
Such a plan should include life insurance beneficiaries (kept up to date), financial accounts (bank deposits and account numbers, debts, credit reports), trusts, wills, health care proxy (living will), final wishes (who do you want to raise your children) and burial requests.
Many people are hesitant to discuss their financial situations in fear of being judged, criticized or ridiculed. If you are one of these private, tentative individuals who is fearful of discussing financial matters with others, you can take your own quiet steps by insuring your life to protect the love ones you leave behind, allowing them to grieve your loss and not worry about the financial responsibility that awaits them.
Where to Start to Set Up Your Estate Plan
First of all, take baby steps and don’t get overwhelmed.
Reach out to reputable insurance agencies and get quotes from at least three companies on 20- to 25-year term policies. Choose the policy that best fits your budget to cover your monthly insurance premiums and your lifestyle. You will need to estimate how much money will be needed upon your death for your children’s care and your estate.
Include your beneficiaries who will manage the proceeds of the life policy upon your death. Make sure to update your beneficiaries every two to three years because circumstances change often to include divorces, births, deaths in families, relationships of previously listed beneficiaries.
Establish a will, if your finances permit it, or establish a revocable living trust. Attorney Suzanne Sayward outlines the advantages of a trust over a will in her article Five Ways in which a Trust is Better than a Will.
Determine a health care proxy. Dr. Javette Orgain writes “that when a medical crisis hits and there is no proxy, I’ve seen families argue over who should make the decisions and what those decisions should be.”
Communicate with loved ones where important documents are located. There is nothing more stressful than not being able to grieve for a family member because you must figure out where important documents are located, which can be in the house or in a safe deposit box.
Establish a folder that is easily accessible. Tabs should include one for insurance policies and policy numbers. Another tab should be for all account numbers and balances, a copy of your credit report, bank account numbers, brokerage accounts, and 401(k) accounts. There should also be tabs for your healthcare proxy and directive as well as for your final burial wishes. And most importantly, provide passwords to the various accounts you have.
Make it as easy as possible for those left grieving your death. You owe it to your loved ones and yourself to begin creating an estate plan now.
About the Author
Dr. Chambers has a Ph.D. in organization and management and a master’s degree in family financial planning. She has worked in various management capacities, including management consulting and program management.
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