When a loved one passes away, it can be an incredibly difficult time for those left behind. Not only because of the expected grieving process, but there are also a lot of financial considerations to take care of in the middle of a highly emotional and often stressful process. Estate Planning for our own death can seem like an overwhelming task (and pretty morbid), but it is crucial to ensure that our loved ones are taken care of and that our wishes are carried out after we are gone. In this blog, I´ll explain why having these conversations now, whether it’s about you or other family members, is important and what are the things you should include in your plan.

We are not milk cartons with an expiration date, if that were the case it would make income planning for retirement much easier for me. Avoiding the topic of death does not make it any less real or any less inevitable. Life is unpredictable and regardless of if you´re perfectly healthy right now, we all know that sickness or accidents can happen at any time. That’s why one of the best things you can do for your loved ones is to plan for any eventuality as much as possible. This means taking care of financial matters such as wills and trusts, as well as making sure that important documents are up-to-date and easily accessible, for example. But it also means taking the time to think about your own wishes and desires and communicating these to your loved ones. Among other things, you must consider:

  • What kind of funeral or memorial do you want?
  • What financial impact will your passing have on your family and/or business?
  • Who should make decisions on your behalf if you are unable to do so?
  • What are your assets and liabilities?
  • What’s the legacy you want to pass on to future generations?

By having these conversations now, you can make the process of dealing with your death much easier for those you leave behind, as you’ll be providing them with some of the financial and emotional support and guidance they will need during this difficult time. Let’s go over a few considerations to include in your plan that can give you peace of mind knowing that your financial affairs will be in order and that your loved ones will be taken care of after your passing.

1. Do a financial audit

Take stock of your assets and liabilities. This includes pulling all your important documents together and making sure they are up to date. Review everything carefully to identify any areas where you may need to make changes in your financial planning. This will also help you to identify any outstanding debts or unfinished business and give your loved ones a clear picture of your finances so that they can handle your affairs in an efficient and orderly manner. The clearer everything is, the more you will prevent disagreements among family members, mismanagement of your affairs, and any legal issues that may arise.

Let me give you an example of why this is important. Recently I was working with a client whose father passed away unexpectedly. My client was told that he would be the executor of the estate and that he would be responsible for managing his father’s business affairs. The problem was that there was no information on or about a business partnership his father had, which made dissolving his affairs that much more difficult. Unfortunately for my client, he’s had to hire an attorney and go through a painful and lengthy probate process to find out the business interest wasn’t worth more than a few thousand dollars. This was all preventable if there had been more planning and accessible information.

2. Put all your financial information in one place

When it comes to financial planning, having a central repository for all your financial information can be extremely helpful. Using a financial planning tool can be a great way to organize your finances and get a clear picture of your overall financial situation. It will also help you easily track your progress as well as any changes you do along the way. This repository should include everything from your bank statements and investment portfolios to your insurance policies and tax returns. Having all this information readily available will make it much easier for you to make informed financial decisions.

This is why all of my clients get access to an online client portal that allows them to track their financial plan, download reports, and upload important information. This can be invaluable when it comes to keeping important documents safe should fire, flood, or theft, among other things, impact the original documents.

Important: Make a commitment to regularly reviewing and updating your repository so that you always have an accurate picture of your financial situation. Also, there are several different financial planning tools available, make sure to choose the right one for you depending on your individual needs and preferences.

3. Have a will in place

Many people put off creating a will assuming they don’t need one because they don’t have a lot of assets. However, a will is not just about who gets your belongings when you die. It’s also about ensuring that your wishes are carried out and that your loved ones are taken care of. Even if you don’t have a lot of possessions, you can use a will to designate a guardian for minor children and distribute your stuff in a fair and equitable manner. Everyone’s end-of-life planning is unique, and as such there is no one-size-fits-all solution when it comes to wills. But one thing is true, without a will your family will have to make difficult decisions about your affairs at an already emotional time.

When my wife and I created our will one of the main considerations was who would take care of our children. This was not an easy conversation because we had to evaluate our extended family’s (sisters, parents, aunts/uncles, etc.) fitness to care for our children which included age and health, capability, geographic location, values, and desire to take on such an enormous responsibility. After all, we don’t want our kids to end up like Harry Potter living under the stairs at his aunt and uncle’s house. Our will outlines who will take care of our minor children, so our families don’t have to fight over it or guess what our wishes were.

4. Get a power of attorney

An essential part of planning for eventualities is putting powers of attorney, or POAs, in place. This document appoints someone to make financial, legal, and medical decisions on your behalf, ensuring that your wishes are carried out even if you’re no longer able to communicate them yourself. There are generally four types of Powers of Attorney: A limited power of attorney, a general power of attorney, a durable power of attorney, and a springing power of attorney. Each can be used for various situations and circumstances. POAs can provide invaluable peace of mind for both you and your loved ones, and it can help to avoid difficult family disputes down the line.

Because of its complexity and the authority a POA welds it’s important to consult with an estate attorney to ensure that you have the proper plan in place.

5. Create a trust

A trust is a legal document that allows you to specify how your assets will be distributed after your death. Without a trust, your assets may be subject to probate, which can be a lengthy and expensive process. A trust can also help to reduce or eliminate estate taxes, which can leave your loved ones with more money to use as they see fit. In addition, trusts can be used to protect your assets from creditors and lawsuits.

I’ve seen trusts used in many different situations and let me tell you, one of the best utilizations of trust is to have some control from the grave. Here’s an example. I had a client approach me after his parents had passed. He was the executor of their estate and his parents had set up trusts for each of the four children with instructions on how those trust would be funded, how the assets were to be used, and how much the trust beneficiary, the child, could access. Each trust had various rules depending on the child. This came in handy when one of the siblings was spending too much money too fast. The trustee was able to lean on the trust document to enforce how the trust was administered. Now, trusts can be complex legal documents that fit many different financial and familial situations, so you will need to consult with a trusted estate attorney to properly structure your trusts and estate strategy.

6. Business owners need an estate plan

Business owners often have a more complex financial situation and for many business owners their business is their biggest investment. If you run a business, having an estate plan in place is vital as you almost certainly have a range of investments and assets that need to be managed and maintained. Having an estate plan in place is essential to protect your investments and other financial resources—and to make sure they are distributed according to your wishes after you’re gone. Without an estate plan, your assets will be subject to the rules and regulations of state law. This can potentially leave your business and family in the lurch, and it can cause unnecessary stress and conflict for your loved ones. Planning now can give you comfort in knowing that all your hard-earned wealth will be handled accurately and with respect.

For example, I have a client with several business interests and a blended family. He created a complex estate strategy that allowed him to structure the disposition of his assets to his new wife and provide significant resources for his children. This served two purposes; ensure his wife has the financial resources if he predeceases her, and to ensure his children inherit what he believed they deserve. This type of plan for business owners makes certain that the transition of business owners and operation goes smoothly and with as little disruption as possible.

7. Review your accounts and their beneficiaries

This ensures that your assets are distributed the way you want them to be and help to avoid any legal complications for your family. When reviewing your accounts and their beneficiaries, it’s important to have the long-term in mind. Beneficiary designations should align with any written plans or further updates. Having a discussion with a CERTIFIED FINANCIAL PLANNER® can ensure all your accounts are properly registered, and that beneficiaries are accurately reflected on them. Beneficiaries should be updated if there are any changes in circumstance within the family, such as births, deaths, marriage separations or legal name changes.

Early in my career a veteran financial advisor told me about a time when one of his clients didn’t update the beneficiary designation on his 401k plan through work. Over the years the client had been divorced and remarried. Sadly, the man passed away unexpectedly and had never changed the beneficiary designation on his 401k to his new wife. At his passing, those funds went to his ex-wife, leaving his new wife with a huge hole in her financial plan. This forced her to have to work longer than expected.

8. Create a succession plan

Another important piece for businesspeople is the succession plan. This is essentially a road map for what will happen to a business when the owner can no longer run it. Without a succession plan, businesses often flounder and may even fail. This can be devastating for employees, customers, and vendors. Having this plan in place will help to ensure that the business will continue to operate smoothly, even in the absence of the owner. It can also help to minimize disruptions and provide clarity during a time of transition.

A succession plan takes time to develop. For many business owners, they often look to their children to take over the business. This can require a vetting process to make sure the children are fit and competent to run the business. This is a situation that played out in a very public way for the Bowlen Family, who once owned the Denver Broncos. Over many years the family attempted to bring in the children to learn the operations and groom them to run the organization. Unfortunately, none of the children of Mr. Bowlen showed enough promise to rise to the top. In the end, the team was sold, leaving a short legal battle and bitter feelings.

9. Update everything related to partnerships, buyouts, and insurance

  • What would happen to your business if you died suddenly?
  • Would your partner be able to take over?
  • If not a partner, who would take over?
  • How would they be able to do so?
  • Do you have buy-out insurance in place in case of death?
  • Would the business survive?

These are all important questions to answer and to have documented in case of an emergency. Without a plan, the surviving partner may be left with a business they are not able to continue managing, or worse, a buyout from an insurance company that does not value the business as much as the original owners did. If you have a business partner, sit down, and talk about what would happen if one of you passed away. Draft up some documentation detailing how you would like the business to be handled and make sure both partners are aware of the plan. Additionally, it is important to have strong buyout and insurance policies in place in case of death. This will ensure that your loved ones are taken care of financially and that the business can continue even if you are no longer there.

10. Decide on your funeral and burial wishes

In addition to dealing with the emotional fallout of grief, many families also must contend with the practical and financial aspects of funeral arrangements. Making your funeral and burial wishes known in advance can help to ease the burden on your loved ones. In addition, paying for your funeral and burial expenses ahead of time can help to ensure that your family is not left with financial difficulties at an already difficult time. The idea may sound disturbing now but having a funeral plan in place can help to provide some closure for your loved ones when the time comes. Even more, knowing that you wanted that specific type of service or that you wanted to be buried in that way and that they were able to carry it out can help them to feel relieved and closer to you even after you’re gone.

The non-financial aspects also matter

When people think of leaving a legacy, they often focus on money. While it’s true that financial gifts can be incredibly helpful, there are other ways to leave a legacy, and some are simpler than you think. In fact, this is something my family and I have been dedicating time to lately, we call it our Family Legacy Project, and is all about collecting and documenting our history, anecdotes, and traditions so generations to come can feel closer to us, even when we’re gone. Here are some things we consider are the foundation of what we’re including in our Project and that go beyond financial benefits:  

  1. By focusing on leaving a legacy of compassion, kindness, and respect, you can make a positive impact that will be always remembered.
    Advice: Have you impacted your community (whether that is your family, friends, neighborhood etc.) in a way that will be appreciated for years to come? Document it!

  2. Sharing your talents and expertise with others is a gift too. Whether it’s teaching a new skill or passing on your love for your career or a hobby, sharing your knowledge is a great way to make a lasting impression.
    Advice: Take some time to tell all about the things you know and love to your children and/or grandchildren.

  3. Making memories and encouraging your loved ones to continue doing so is also valuable. Spending time with loved ones and creating happy memories together is one of the best ways to ensure that your legacy will live on for years to come.
    Advice: Work can wait. Believe me, that meeting it’s not that urgent. Go make memories today.

  4. Passing on your values, traditions, and stories can be a source of strength, comfort and pride is something that will live on long after you’re gone.
    Advice: Document those family recipes, take that family photo you feel is cringy, tell that bad joke your grandpa used to make to your kids. Those will be treasures for future generations.

  5. And while you’re at it, it’s valuable to also document things such as the family member’s health history.

If you get really invested in the project you can do deeper research into your biological legacy, or your epigenetics. This is something I learned about recently and I think it’s fascinating. Epigenetics[1] is biology field of study that looks at how your behaviors and environment can cause changes that affect the way your genes work. Isn’t that amazing?

Closing thought

By sharing our history with future generations, we can give them the gift of understanding who they are and where they come from, and this is a valuable gift that we can all give. We go about our lives assuming that we have all the time in the world and forget that our lessons can help others navigate the challenges of the future and that our insights into the choices that were made in the past can shape how others impact our world later.

Beyond your financial achievements, your history is a story that deserves to be told and retold. Whether it’s of struggle or triumph, of love or loss, it’s a story that will help your loved ones make sense of the present, shape their future, and honor your memory.

[1] https://www.cdc.gov/genomics/disease/epigenetics.htm#:~:text=Epigenetics%20is%20the%20study%20of,body%20reads%20a%20DNA%20sequence.


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