With the recent passing of vocal artist and major talent, Whitney Houston, I began to think about the “what if’s” in life. I have been told that I tend to go to a dismal place when I think about situations such as Ms. Houston. I immediately go into planning mode because I was hoping that she had done her estate and financial plan to protect her assets and honor the distribution plans she wanted.
In thinking this way,
- What if you were to die, how would you want the family to handle your arrangements?
- What if you were to die, how do you want to be remembered?
- What if you were to die, will your family be prepared financially to move on without stress?
- What if you were to die, who will be responsible for raising your kids?
After having a very candid conversation with my girlfriend, also a financial advisor, who at age 40 learned that she had breast cancer, we both realized how short life is and how being prepared is so important. She was so thankful that she decided early in life to get life insurance because at this point, she will not be able to obtain any until she is cancer free for at least 5 years. I identify with this scenario all too well. I had some medical issues in my early 30’s that prevented me from obtaining outside disability insurance. I was so upset at the time because I wanted to further protect myself and my family from an unexpected illness that may result in loss of income for our family. I wanted to put this in place because I knew that obtaining it early would mean it was less costly and I would not have to think about it anymore until my salary increased then it may have meant an update to the policy instead of a new issue.
There are those who do not want to discuss death because for them it makes it a reality. Unfortunately, the reality is we all are going to die we just do not know when. I hope that you will take the time to properly prepare.
- Are all your legal documents prepared and safely stored?
- Have you identified a guardian for your child/children?
- Have you identified a person you completely trust to share the location of these documents?
- Have you evaluated your beneficiary forms to see if they reflect the individuals or entities, you wish to leave your assets?
- Have you established a team of professionals (estate attorney, accountant and financial advisor) to help you evaluate your estate for implementation strategies for your plans and wishes? Many may not know that in the State of Maryland, you are required to pay estate taxes on any estate valued over $1M.
After our daughter was born, it became very clear to my husband and I that we needed to protect ourselves and our daughter’s interest. The first thing we did was establish a trust and will. We evaluated our insurance needs and increased the amount of the coverage we have. We selected our daughter’s guardian and separated the duties of the caregiver and the person with the financial control of our assets. Finally, we updated all beneficiary forms for our insurance, 401Ks, and IRAs so that they reflected what was written in our trust.
I know many people may find this topic overwhelming, however, that still does not mean for you to neglect the preparation. Sit down with your financial planner and begin the conversation because this is the first step to protecting your family from the unexpected.