After my aunt—who took care of her elderly mother and disabled sister—passed away suddenly at 52, our entire family scrambled to try to find the paperwork and insurance information that specified what happened to her estate. A death in the family is a stressful time, which is compounded when you add in financial uncertainty. It didn’t occur to my aunt that she would need to have her estate set up so young, but you never know what life will bring. Because of this experience, I’ve learned that one of the greatest gifts you can give to your loved ones is a well planned out estate.
Unfortunately, even with my family experience fresh in my mind and the recent birth of my son, finding the time to plan out my estate has not been easy. Day-to-day life always seems to get in the way. But getting the bare bones of your estate set up will take less time and money than you think. Here’s a guide to the bare minimum you need to make sure that your assets and family are taken care of:
1. A Will
I was horrified to learn that if my husband and I were to die intestate while our son was still a minor, the state would decide where he went, despite the fact that we have already discussed our plans with family. We needed to have a will to protect him. We learned that setting up a will was a very quick and easy process once we found a lawyer. We received a recommendation from our financial adviser, but you can also search here for will and probate lawyers in your area.
Writing our will began with a phone call wherein our lawyer determined our estate was valued at less than $5 million (which I assume meant she could use a simpler will template), and who our son’s custodian and our will’s executors would be. After that 15 minute phone call, our lawyer emailed us a pdf of the will that same day to check for typos or other issues. We signed the will in her office two days later, and my husband and I felt much more secure. The entire process took about an hour of our time (including the original phone call) and cost less than $200.
In the future, I hope to rewrite our wills to be more specific about the disbursement of our assets, but for right now, this is enough to protect us if the unthinkable happens.
2. A living will
It didn’t occur to me to ask for a living will in addition to our typical will, but our lawyer included it since it is a common and necessary supplement to your estate planning. Without a living will in place, your wishes could be disregarded should you fall into a coma and need medical intervention to survive. This could potentially have serious consequences for your family if they disagree about what you would want and if you do not have the money for extended medical care.
The lawyer who draws up your will should also be able to create a living will for you.
3. Sufficient life insurance
It can be easy to forget how much your life has changed after marriage, children, and a higher paying career. Many of us continue to live with the same bare minimum or no life insurance that we had when we first started our careers. But life insurance is an important part of making certain that your loved ones are taken care of – so you should make sure you have enough. If you’re intimidated by life insurance, start with the insurance offered through your employer. You HR department should be able to offer you some counseling (or phone numbers where your questions can be answered) as to what options are available to you. Don’t forget, however, that stay-at-home parents should also be covered by life insurance. Just because they are not bringing in an income does not mean that they don’t need insurance. That means you will also need to see an insurance professional or search for a policy for yourself if you or your spouse doesn’t work outside the home.
In addition to the life insurance offered to my husband through his workplace, we are also setting up insurance for both of us through our financial adviser.
The Bottom Line
Getting these three parts of our estate set up was relatively quick, inexpensive, and painless. I know that we are not done in terms of making sure that our son and our families are protected, but we have the bare minimum in place for our estate. Even if you don’t have much time or money, it’s worth it to have that kind of peace of mind.
Photo credit: iowa_spirit_walker