My Next Project- Death Planning

It's been more than 18 months since my dad died, and I opened a probate.  I realized very quickly in this process that my dad did not know what he was doing when he planned for his death.  He tried to make it very easy on us, but we ran into roadblocks that could have been avoided, I believe.  He did have a will and did the best he could, but his life insurance was handled incorrectly.  As soon as I realized what I was up against, I decided that once this process was complete, I would take a piece of my inheritance and redo my own will.  I have known for years that we needed to change our guardian. The guardian, for us, was the driving force that caused us to get wills done in the first place.  In my state minors are placed in a group home while the fate of their futures are decided in court.  The only way to avoid that is to have a will with a named guardian.

We are not finished wrapping up Dad's estate.  At this point it will be messier than it would have been had we finished earlier as the probate ends this month.  Given what I have learned, I am hoping that this project will protect my family in the event of my death.

Once I realized how little I knew, I set up an appointment with an estate lawyer.  My only regret was not doing that sooner.  That appointment was invaluable, and I would do it again if ever faced with being the executrix of an estate (I have no plans to agree to being an executrix for anyone again, and I do not recommend doing it.  It's lots of work.  It's frustrating work.  If you have the money, pay a lawyer to do it for you).

In order to protect my own family as much as possible, I have ordered this planner:

I'm Dead, Now What? (link to the left)

The reviews on it indicate that it is very helpful for guiding you to think through those things that people who would be charged with handling your affairs need to know.  I expect it to be a process to complete the book that may take weeks or even months.  I expect that it may even need to be updated from time to time and possibly replaced every five years or so, but as morbid as it sounds, it would hopefully make an already difficult situation easier. The reality is that unless we are here until Jesus returns, we will all die - might as well plan.

On a lighter note, many years ago my sister-in-law received a phone call soliciting her to pre-plan her funeral. She responded that this would not be necessary as she was not planning to die.  I thought that was a great way to handle that call. I mean would the telemarketer just think you are crazy, or would they think that was funny?  Would they just stop trying to make the sale right there?  

I have heard that currently estate planners recommend Living Trusts instead of wills.  I have yet to look into all of that, though I know I should.  

Finally, I will leave this post with a few things I do know.

For parents of dependent children, when you name a guardian, if you want that guardian to allow your child to purchase a car from whatever money you leave, you have to state that in your will (at least that is the case in my state).  My own opinion on that is that teenagers demand a lot of driving from their parents.  Why would I make it even more challenging on a family willing to raise my kids by not allowing them the freedom to make that choice?  

Before you choose your beneficiaries for your life insurance, check with the company with whom you have the insurance to see if they limit the number of beneficiaries you are allowed.  Just because the form only has two or three lines does not necessarily mean that you are limited to two or three.  Since we have four children and two of them have already reached adulthood, we need to revisit our policies and look at how our beneficiaries are set up.  This is important because life insurance is not taxed.  If you have a big enough policy and want your children to split it, and you don't name all of them you have a couple of problems.  1. Life insurance does not go through probate and is not part of an estate, therefore you are counting on your kids to do the right thing. 2. If the policy is big enough, and your child does the right thing- say child A is the beneficiary and plans to split the policy with child B, child B is receiving a check from child A rather than from an insurance company, and if that check is bigger than the federal limit for cash gifts, it does get taxed.  

Know what your state does in the event that you die without a will.  I have a friend who has shared a nightmare situation where a man died suddenly with no will.  By state law his wife and children were to split his estate.  In order for his wife to stay in the house, she had to buy out her children, by law.  I believe the problem was that the house was solely in his name, but these are the types of loopholes you want to avoid because grieving is hard enough.