Death is an inevitable part of life, one that should be carefully planned for. Among other considerations, it is important to set up a few precautions to financially protect your loved ones when you pass away. There are three things you’ll want to make sure you have in order before you pass away.
Life Insurance
Death is both a tragedy and very expensive. Between the cost of funerals, grave preparations, and other incidental costs the expenses can easily rack up. Having a life insurance plan can help offset some of these costs as well as go towards repaying any debts you owed in life.
Term life insurance can be a less expensive option that might suit your needs and circumstances better than general life insurance. Term life insurance includes different time length options depending on your particular needs. The insurance company will pay your beneficiaries if you die during the policy’s term, in exchange for a monthly fee to the insurance company to keep your policy active. If you are working in a high-risk environment, a term life insurance policy for the time you plan to work in that field may be a good option.
Write a Will
Writing a will is essential to ensuring that your assets go to the right people after your passing. It also makes the process of dividing your assets go much faster than leaving it for the state to decide. When writing a will, there are a few things you’ll need to keep in mind. Make sure the will is legally binding, which requires signatures from you as well as two witnesses not listed in the will. It may also need to be notarized, depending on your state laws. Keep your debts in mind when leaving large assets to your loved ones such as houses. If you are still paying off a mortgage or auto loan, make sure the person you leave the asset to can financially handle taking over repayment.
Name an Executor
Just because you die doesn’t mean your finances don’t need to be properly managed, and the carrying out of your last wishes won’t just happen on its own. Part of estate planning involves the creation of a will and naming an executor for your estate. An executor is someone you name to help ensure your last will and testament is carried out properly. Without one named in your will, the state will usually name your spouse or eldest next of kin as the executor, whether or not they are prepared or trustworthy enough for the position.
With these three things taken care of, your assets will be in good hands after your passing, and your loved ones will be protected from the debts left behind as well as potential fraud that may occur in the ensuing chaos of sorting out your assets.
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