One of the most challenging things in life is losing a loved one. In the midst of what can be a tragic event, we’re forced to make a myriad of decisions, trying to best honor the one we lost. It can be overwhelming. Painful. Stressful. Numbing.

If you’re lucky enough to have many loved ones in your life, chances are you have experienced loss, as well. And while death is inevitable for all of us, one thing is not: being prepared.

Based on my experiences of personally losing clients, relatives, and most recently a sibling, here are things you can do today to help ease the burden on those you will eventually leave behind:

Take time to think about how you want your assets distributed.

Who do you want to receive various accounts? Are there any sentimental items you would like specific people to have? Do you have young children that will need a guardian to help care for them? If you’re older and have more than sufficient resources to last your own lifetime, does it make sense to begin passing some down to help support people or charities you care about?

Assess whether you have sufficient life insurance.

If you were to die today, are there enough resources to provide for those who depend on you?

Work with a qualified attorney to draft an estate plan.

In my opinion, a “qualified” attorney is one who focuses primarily on estate planning. Over time, they will have seen a number of different scenarios and circumstances where their templated documents can be improved. An attorney who rarely handles estates may not necessarily have this knowledge or experience.

Don’t forget backups in each role.

Naming your spouse on everything may be fine, but what happens if you both pass away in an accident and no successor executors or trustees are named?

Make sure the beneficiary designations on all of your accounts match the language from your estate planning documents.

You can have perfect estate planning documents and your estate might still be a mess. Why? Beneficiary designations bypass your will, so it’s important to make sure they coincide with your current wishes and documents. And don’t forget to add/update beneficiaries to accounts such as checking, savings, retirement, investment, pensions, annuities, life insurance, and even your home if your state allows it.

Create a “legacy binder.”

This is a folder that includes information others may need in the event of your incapacity or death. Common elements are:

• Bank and credit card information
• Benefits information
• Child care preferences
• Emergency phone numbers
• Funeral arrangements or preferences
• Insurance policies
• Investment accounts
• Medical information
• Personal notes to loved ones
• Pet care
• Property information
• Tax returns
• Usernames and passwords for:
  • Banking
  • Email
  • Investment accounts
  • Social media
  • A password manager can be a huge help with maintaining this list, as passwords are likely to change periodically.

Note that this may contain a lot of sensitive information, so be careful where you keep it and who has access to it. At a minimum, your executor should know how to access it.

Review your documents and overall plan periodically.

Life happens. Make sure everyone named is still living and any executors, trustees, and/or guardians are capable of helping.

Completing the tasks on this list takes time. But I can assure you that your loved ones will appreciate your efforts to simplify your estate and hopefully provide them more time and space to focus on grieving.

About the Author

Michael T. Powers, CPA, PFS, CFP® (Mike), is a flat fee-only financial planner based in Richmond, VA serving clients virtually nationwide. He has been fortunate enough to help hundreds of people successfully retire over his career. As a CPA, being tax efficient in financial decisions is always on his mind.

Photo by Aron Visuals on Unsplash.

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