Death and Money: Helping your family now in case something happens later
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Running Ahead of Ourselves A lady I know of died last night. It was expected; she was diagnosed with incurable cancer last spring. I didn't really know her, as I'd just recently moved into a place where I would have had contact with her. I wish I'd known her, as her friends are going to some great lengths to honor her. It's been really cool to see people coming alongside each other, comforting each other, speaking meaningful things to each other. One of the things that has comforted people, that I've heard them mention when they think about her and her family, is that they are in a secure place financially.
I'm not sure what plans they have in place, but it does seem that they have been able to cover her medical costs and will be able to cover her funeral without a lot of trouble. This comforts people because they know that money is one worry this family does not have to carry around as they grieve the loss of this wife and mother. This has all made me think, hard. There is so much that you can do before a crisis hits to help your family when it does. Here are the things I'm glad I have and the ones I intend to look into.
1. Health insurance
I have great health insurance and will have better next spring, when we switch to Dave's plan instead of mine. It's tempting to try to go without health insureance, but the truth is that we really don't know when something will happen. It seems better, both for the sufferer and for those who would be caring for them, to pay the cost of insurance, rather than risk more debilitating bills later.
2. Emergency fund
If sudden, severe illness isn't an emergency, I don't know what is! Even though the average emergency fund won't make a big dent in medical bills, it can help with other things. Supplementing income, for example, if a caretaker is forced to take extra time off. Buying food, if all the other money is taken up covering medical costs. Planning a funeral, it it comes down to that. I'm building my emergency fund, though it's not nearly there yet!
3. Life insurance
I'm lucky; my company provides life insurance for each employee at minimal cost. It's on the minimal side of things, but it is enough that it would help my family if something happened to me. I've been tempted to opt out of it, but now realize that I don't want to do that. I hope Dave never has to use it but, if he does, I want it to be there for him. Even if he just used it to pay rent for several months until he could figure out what he wanted to do, the cost is worth it to me for his peace of mind on that front.
4. A written (or videotaped) will
The thought of writing a will makes me think of a myriad of mystery books I read as a kid, where they had to find the will, or someone was killed over a will. They are associated with deception, in my mind. Now, though, I can see their value. Giving loved ones the security that they have what they need or want of mine just makes sense, because it would give them less to be burdened with if something happened to me. I haven't decided quite how i want to go about making one of these, but I've decided that I do.
5. A plan
Some years ago, when I was an undergraduate, my parents sat me down on one of their visits and handed me several stapled, printed pages. It was the state of their finances, a statement of where they wanted to be buried, and other various instructions for use if something happened to one or both of them. They went over it with me, and I remember doing a lot of nodding. I couldn't really conceive of them not being around. In the last years, though, I've seen just how quickly something could happen and the value of their plan. I would still have a lot to learn about how exactly everything is structured, but it's great to know that all the phone numbers and people to contact are in one place. I would love to say that I've done the same for my family, but I haven't. Not yet!
6. Openness and honesty
It's easy, or at least it is for me, to not talk about my financial difficulties. It's easy for me to say, "Yeah, I'm fine," when people ask me if I can really afford to fix my car again. And sometimes, that's appropiate. But there are also times when it is appropriate to say, "No, I'm not ok," (if that's the truth). That doesn't mean that the person I'm talking to has to help me, or has to get others to help me. It does mean that I know where I'm really at and am not ashamed of it. In particular, it's important to be honest about money with those close to you. One of the things I want my family to be able to do is ask for help when they need it, even if an illness or tragedy brings that need.
I'd love to write a more poetic tribute to this woman and her family, but this is where I'm at today. To this woman and her family, whose privacy I want to respect, please know that she was loved, and that so many people care about you as you grieve this loss.
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Oh, man. Thanks, Sarah, for writing this. I've been pondering death a lot lately (that's what happens when Halloween comes around - some people get candy; I get morbid), and I was trying to figure out how to get everything in order. This gives me some initiative. It's not that hard, right?
The will thing is better than nothing, but one of many reasons I think trusts go the extra mile is that they keep what you leave to your loved ones out of public record. This can be important because there are a great deal of financial predators out there who watch the release of those records and hone in to see if someone wants to "invest" or get rid of the priceless family heirloom for a song when they are vulnerable. Just a thought. And definitely the financial thing is helpful Sarah, you are so right.
The last thing anyone wants to do when they are grieving (trust me) is worry about the money or if possible having to go to work. Just having the time to honor the way the grieving process goes down for you is one of the biggest gifts you can have from a loved one who passes on.
You should also have a health directive or living will, something that indicates your wishes should you become ill (think Terry Scheivo, misspelled - sorry). AND make a video tape of YOU reviewing these papers/wishes. My mother died with all of these papers in order but some of her relatives had (and still do after 16 years)trouble accepting my dad/me carrying out her last wishes. This includes you funeral plans -open casket or cremation or whatever you want. Don't forget your DNR if that is also your desire. A new wrinkle is you need to leave your PIN's or passwords for anyone who might need immediate access to account information. Don't put this off - my mom died suddenly at 51 with no health issues that we knew of, except for that blood vessal in her head that ruptured. Death is hard, sudden death horrible and unless you have gone thru this you have no idea of what families can do to each other, all under the guise of "what dad/mom/sis would have wanted". Write down what you want, copy it & send it to a lawyer AND then videotape what you want for your final days and goodbye. Far from morbid, it leaves you with feeling empowered that you have done what you can to ease & protect your surviving family. Plus you don't have to worry if they took the college fund for you grandchildren & put you in a butt ugly expensive casket that was sold to them at their weakest moment. Many web site exist to walk you through your legal & personnel choices.
Don't forget this one. I've been cautioned, although only by our insurance person, that if you are diagnosed with something like asthma later, your chances of ever obtaining life insurance in the future are slim. While I wish both of my kids long and productive lives, I know the reality of losing a child - you still have bereavement, you still have planning, you still have funeral expenses. If my kids get to be grown up, as I hope, then having bought them insurance now is something of a gift to their future families, people I don't know yet and might never know.
My in-laws scoffed when we got life insurance for ourselves and the kids. But to be truthful, by the time my mom was my age, she was widowed 8 years already and we'd gone from a lower-middle-class lifestyle to a middle-lower-class, because she was slammed with depression that didn't seem to ever go away. I'm grateful my uncle managed to fight for her to receive a pension - it was the buffer between living on the street or something. We're in a good position now, but I learned the lesson.
Your comments are awesome. There seems to be a lot of ways of doing a living will--does anyone know what is best?
I haven't heard of life insurance for kids, but it does make sense. Thanks!
Having a financial plan to pass on is great. If that's too ambitious, though, just a simple document that lists all the bank accounts, brokerage accounts, and mutual funds, together with URLs or phone numbers, could be a great help, especially if the person who dies is the person who has been managing the finances for the household.