Preparing for Death

Most of us don't like to think about it, but the reality is that all of us are going to die someday.  Hopefully we will leave behind a large number of people who will miss us.  What we do not want to do is make the process any harder on ourselves or our loved ones than it has to be.  Like many other things in life, a little preparation can go a long way towards easing burdens, and when you are terminally ill is not usually the best time to start those preparations.

Prepare Yourself

Think about what you want

It is one thing to say "I don't want to die in the hospital hooked up to a bunch of machines" and yet another to decide what you DO want.  The younger you are the greater the possibility that if you die in the near future it will be via sudden accident rather than lingering illness.  Still, you need to consider some "what if's" and talk to your doctor and your next-of-kin about them.  Do you want to exhaust every effort to keep you alive, or are you ready to go?  Would you rather die at home, or someplace away from where your children are?  These decisions may never have to be made, and what you would choose today may be different from what you would choose later in life, but giving your loved ones some guidance now, before death is on the immediate horizon can help make the decisions when they have to be made.  

Think about your spiritual beliefs

While there are some people who are avowed atheists, many of us profess religious beliefs of one sort or another.  While deathbed conversions or confessions make good movie scenes, when I'm on my deathbed I do not want to fear what is to come.  Live your life today in accordance with what you believe about the hereafter.

Live your life fully

There is a country song about living like you are dying, in which the man who was told he was dying went "sky diving, Rocky Mountain climbing and 4.7 seconds on a bull named Foo Man Choo".  Unfortunately, by the time most of us realize we are indeed dying, it is too late to do those things.  As another old saying goes, "No one laying on their deathbed wishes they had spent more time at work".  While we have to think about the future, don't put off living until....because until may never come.

Prepare Your Family

Death is a tough subject to discuss, but failing to discuss it doesn't keep it from happening.  If you have minor children, who do you want to raise them if you and their other parent are unable to do so?  Have you spoken to that person?  Named them in your will?  Have you and your spouse discussed end-of-life care and your wishes about it?  Is there dissension in your family that is likely to cause trouble if you die?

If death is on the near horizon, tell your family what you want.  Do you want to be as conscious as possible or as pain free as possible?  Do you want to fight to the bitter end or throw in the towel and hook up the morphine?  You may even want to plan your own funeral. 

Prepare Your Affairs

Have the proper documentation prepared

At a minimum, this means most people need a will.  If you are single with no children, and you know the laws of intestate succession in your state (what happens to your property if you die without a will) and are happy with that distribution, you may think you are fine without a will--and the fact of the matter is, it won't make any difference to you because you will be gone.  However, it is amazing the fights some families can get into over seemingly stupid things regarding inheritances, and I can tell you right now who wins such fights--the lawyers.  

Besides your will, you need to consider a Durable Power of Attorney (document that allows the person you choose to act as your legal representative if you become incapacitated), a Medical Power of Attorney (allows the person  you choose to make medical decisions for you if you can't) and a Living Will (spells out your wishes about end-of-life care.  If you do not have these documents and get to a point where you cannot make decisions for yourself, someone will have do do it.  The person chosen then may not be the person you would choose.  Also, if there are disagreements in the family about what to do, ending up in court becomes more likely.  Documents you may need include a Special Needs Trust if you have a handicapped family member.  

Make Lists

Document your assets and let someone you trust know where the records are kept.  Somewhere known to you and known to your executor, you need to have a list of all financial accounts, along with passwords, if needed. Also, list your real property as well as any movable assets of substantial value (cars, furs, jewelery, good electronics for example).  For most of us, most of our property comes under the category of "used furniture" which we all know has little value (but is expensive to replace).  If you have life insurance or annuities that should be on this list as should any retirment plans.  Do you have a facebook account?  Can anyone access it?  What do you want done with it?  Who should be notified of your death?  

Make Money Available ASAP

Just because you die doesn't mean your bills will immediately stop, particularly if you die young.  Try to arrange things so that somone has access to some of your money quickly, particularly if there are employees to pay.  This can be done via  a joint bank accout or a "payable on death" account.  This gives someone the ability to pay urgent bills even before the will is probated.  

Consider What Would Happen to Your Business

If you own your own business, consider the value that business would have if you didn't show up tomorrow.  If you are the sole owner and sole employee and the business basically sells your labor, then the only succession plan you need is that your family needs to know how to shut the business down.  On the other hand, if you have employees and believe the business has value as on ongoing entity, then think about what you would want to happen to it if you dropped dead tomorrow--and then get a lawyer to draw up papers that make your wishes a reality.  

Conclusion

Death is going to happen; be ready when it does.

*Part of Financially Savvy Saturdays on brokeGIRLrich, A Disease Called Debt and Femme Frugality*

12 Things an Executor Should Do

The executor/executrix is the person charged with acting in the place of someone who died.  It is this person's job to make sure the decedent's bills are paid and that his/her financial affairs are wrapped up, and once creditors have been paid, it is the executor or executrix's job to see that the assets are distributed according to the decedent's will.  I don't know about other states, but in Louisiana, if a person dies without a will, the person who does that job is called an administrator/administratrix but for the sake of simplicity, I will use the term "executor/trix" throughout this article.  If you are appointed executor/trix here are some steps to follow:

Discuss the job pre-need:

Hopefully you will not be surprised you were given this job.  Hopefully the person who so appointed you asked your permission before doing so.  Ask this person to prepare a list of assets and accounts for you.  If not given to you, you should know where in the house to find it.  My dad kept his on a computer and in a fireproof box.  This list should include:

• Bank Accounts:  At least the names of the bank(s); preferably account numbers as well;
• Investment Accounts:  Account numbers, holders, websites, passwords.  Everything the executor/trix needs to find all the money
• List of Real Estate Holdings:  If there is rental property, a copy of all leases, or at the least, the amount of rent due, and from whom; or if a mortgage is held, the name of the debtor, amount due and date due; 
• List of all regular bills:  This is particularly important if they are paid automatically electronically.  It allows the executor to quickly shut off unneeded things (like NetFlix) while making sure the power bill is paid.
• List of known debts:  Creditors have first rights to an estate.  Mortgages should be on this list as well as any other long-term debt.
• Insurance Agent:  It is going to take time to wrap things up and the decedent's homeowner's insurance can be kept in effect during that time.  If there is life insurance, the executor needs to know about it so it can be claimed.  
• Funeral/Burial Choices:  Especially if there may be disagreement among the heirs about the type, location or price of the funeral, having in writing what someone wants can reduce contention
• Digital Information:  Having access to email and/or facebook accounts makes it easy to notify those important to the decedent about his/her death.  However the decedent needs to realize that giving out those passwords may give out secrets s/he would rather keep.  However, people should give serious consideration to giving the executor/trix access to photo accounts such as Google Photos, Flikr, or Amazon.
• Business Information: If the person owns a business, with employees, those employees will need to be paid.  If the business is a sole-proprietorship (not a corporation or LLC), the business will die with the owner, even if the name and everything else is sold or passed on to heirs.  You need to know where to access any payroll records and tax records, as well as any information needed to keep the business running (if possible) until plans can be made for its future: 
• Location of last year's tax return or name of tax preparer.  As executor/trix you will be responsible for filing the decedent's final tax return.  Having the prior return helps.
• If the will contains any surprises, an explanation:  I think most children expect to share equally in their parents' estate with their siblings.  If one sibling for some reason is getting substantially more or substantially less than others, a written explanation from the parent may help avoid a court fight (but don't count on it).

Take a Deep Breath

There is very little that has do be done immediately, other than the funeral.  Get through that, and allow yourself to mourn.

Notify Those Who Need to Know:

If the decedent was receiving any kind of pension or government aid, those agencies need to be notified of the death.  While the funeral home may notify Social Security, you need to cut off any military pension, VA benefits, or corporate pension. If the decedent had life insurance, a claim must be made. If the decedent had minor children, Social Security should be notified so benefits can be paid to the children.  

Gather the Paper:

You are going to need a Death Certificate (the funeral home will order these, and you only need a few; most banks etc. today will take a scanned copy), and a list of assets and a copy of the will.

Hire an Attorney

Unless you have no money and the decedent had no money, hiring an attorney is the smart thing to do.  Yes, you can probably find all the forms you need online or at the library at the local courthouse, but this is one of those cases where it can be expensive to fix something that could easily have been done right in the first place had you hired the right person.  Give some thought to the expected size of the estate, the expected complexity of the estate and the expected problems (or hopefully lack thereof) with the heirs before hiring an attorney.  You don't need the guy in the corner office of a fancy firm in a high-rise building to handle passing a house and bank account from the surviving parent to siblings who get along.  However, if the will includes trusts, ongoing business interests, and multiple families, and substantial assets, that may be the person to hire.  Call the local bar association or use Google to find local attorneys who specialize in estates.  The outside of their office should give you some clue about where they rank fee-wise.  Most will give you a quote after the initial consultation (which should be complimentary) and will give you a general idea of what will happen and when it will happen.  

Open a Bank Account for the Estate

The attorney will likely advise you to open a bank account for the estate.  While Louisiana is different, in most states there is an initial round of paperwork followed by several months of probate--a waiting period during which creditors can make their claim.  After the initial round of paperwork, you will be given a document to take the the bank to claim the money for the estate.  That money cannot be distributed to the heirs at this point (unless it is a pay on death account) but can be used to pay the bills of the decedent or the expenses of the estate (like keeping the lights on in the house).  This account is also where you deposit money owed to the decedent or the estate (like rent collected from tenants).  

Manage the Affairs of the Decedent

You are now authorized to financially act as the decedent would.  You can collect debts and you have to pay bills.  You have a fiduciary duty to act in the best interest of the estate so as to maximize recovery for creditors and to provide as much as you can to the heirs.  If the house needs to be sold, you have to hire the real estate agent or otherwise arrange for it to be sold. If one of the heirs wants it and it was not specifically willed to that person, you need to figure out how to make the other heirs whole, whether is by that person paying the estate for other shares or by that person taking less of the pot--or whatever other way the heirs agree.  

Communicate with the Heirs Early and Often

Hopefully, you will be in a position shortly after the funeral to get a basic handle on the decedant's financial state.  You may not know it down to the penny, but you should be able to say "Dad had money in the bank, but the medical bills are really high and they just keep coming" or "Mom had a reverse mortgage on the house and almost no money in the bank" or "It looks like we are each going to get about $$.  Send everyone an email every month or two about the status of things; how much money did you spend, how long will it be etc.  

Talk to the Heirs About the "Stuff"

While scanners mean that we don't have to fight
over old family photos anymore
there may be something that everyone wants.

Most people who die have a house full of used furniture.  In the grand scheme of things, used furniture isn't worth much, and no creditor cares what you do with it.  However, heirs often do.  Get them together as soon as possible (maybe around the time of the funeral) and formulate a plan for dividing the things.  If it is possible and/or feasible to leave the house set up for a few months, and everyone agrees to leave everything alone for that time, it may be easier to deal with when emotions aren't as high. On the other hand, if the house is a rental, or if it needs to be sold to pay bills, or if the heirs are afraid that someone will take the wrong thing if it is left in the house, then dividing things up shortly after the funeral, before folks go back to "real life" may be easier.  Find out if the heirs are set on wresting every possible nickle from the estate, or if they want to take the easy money (bank accounts) and send the excess stuff to Goodwill. Try to keep everyone on good terms when it comes to dividing up what cannot be split.

Follow the Lawyer's Instructions 

Hopefully you picked a lawyer who has done this before and can tell you what to do to gather the assets.  On the other hand, you can ask the attorney to do it for you.  It all comes down to the amount of trouble involved, and how much you want to pay the lawyer vs how much you'd rather do yourself.  

Complete the Final Tax Return

You can do this yourself, or use money from the estate to hire someone to do it for you.  

Distribute the Assets

Hopefully this is no harder than writing a check.  The reality is, when heirs fight over an estate, the only winners are the lawyers.

Have you ever served as an executor/executrix?  Do you have any advice for those who may get this job in the future?

*Part of Financially Savvy Saturdays on brokeGIRLrich, A Disease Called Debt and Debt Free Divas*