Decisions We’re Making Now to Protect Our Son When We Pass
Dying is expensive. A new study by GOBankingRates found the average national cost of end-of-life care and funeral services was $18,978. But there are ways to ensure your family doesn’t feel financial pain when you die.
There are many laws around transferring assets. Make sure you understand estate tax rules so you don’t burden surviving family members.
According to influencer Amanda Grossman, it can be hard to talk about dying, especially once you have kids. But after she and her husband had the tough conversation and made some key decisions, she felt much better.
After my husband and I married but before we had kids, we neglected estate planning almost entirely. And in the three years that our son has blessed us on this earth? Well, it feels like we haven’t gotten anything else in place besides potty training, solid foods and a strong sleep schedule (foundational, I can assure you!).
Yet figuring out who is going to inherit our wealth, raise our toddler in case we both pass, and cover our funeral costs seems more important than ever. In a new study, GOBankingRates found it’ll cost us an estimated $17,327 in funeral and end-of-life medical costs in our state of Texas. In the study, it calculated the cost of dying in all 50 states based on the median out-of-pocket funeral expenses and the average out-of-pocket expenditures for end-of-life necessities.
Let me walk you through the three major decisions we’ve finally made — the ones that are going to help us sleep better at night.
1. Who Will Raise Our Son in the Event We Both Pass
Figuring out who will raise our son if my husband and I both die unexpectedly kept us in “paralysis by analysis” the longest. It’s a tough choice to make.
We asked ourselves these questions while sifting through lists of trusted loved ones:
What are their beliefs, philosophies and religion, and do we want those passed onto our child?
Where do they live, and is it nearby other family or not?
Do they have their own children, or will they likely have their own children in the future?
Do they have the ability to raise our son at least somewhat in the style that we would have?
Would they want to take on this role?
Estate Planning Tools to Accomplish This
To designate a Guardian for your kids, you’ll need to set up a will or a living trust. We’re working with a lawyer to get ours in place.
2. How We’ll Pass the Financial Baton
The next decision we tackled was how to pass the financial baton — to either a surviving spouse, or to our heirs — while keeping as much out of the probate process, or estate court proceedings, as possible.
Learn: What Happens to Your Debt When You Die?
Since I’m the main financial person in our household, I decided to put together a “Family Master File” to begin the process. This includes information on how to access each of the following account types:
Checking/Savings Accounts
Credit Cards
Life/health insurance policies
Retirement accounts
Investment accounts
Employer contact information
Mortgage/debt information
Estate Planning Tools to Accomplish This
Create a family master file. Check with your financial institutions for their rights of survivorship — if one spouse dies, is a joint account holder given access to the money? (I found accounts in Texas don’t default to this option). Update your beneficiaries on each of your policies and accounts.
3. Who Will Inherit Our Assets
The final big decision we discussed during this round of estate planning was how to pass down our assets, including what would happen if our child was still a minor when we passed.
I took the initiative to list out all our assets and then called a family money meeting to discuss.
Related: What to Do If You Are the Executor of a Will
Estate Planning Tools to Accomplish This
Update each of your beneficiaries on accounts — life insurance policy, IRA, other assets — to reflect your wishes. Work with a lawyer to incorporate your wishes into a will and/or living trust.
Part of being a responsible parent and spouse is making the hard decisions and having the difficult discussions so that you can put everything in order. Doing so ensures that your children and surviving spouse will be taken care of in the event the unexpected happens.
Click through to learn how to write a will that protects your assets.
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This article originally appeared on GOBankingRates.com: Decisions We’re Making Now to Protect Our Son When We Pass
