According to Bankrate, 57% of Americans do not have a will, leaving their personal finance, guardianship of children, and many other end-of-life decisions in the hands of strangers (state judges.) The lynchpin of a solid estate plan is having a will, but Vanguard suggests you also need the following assembled to leave your loved ones in good shape following your death:
- Your assets. The value of all your personal and financial property. The type of assets you own, including brokerage accounts, retirement accounts, real estate, and life insurance policies. How those assets are owned: jointly with your spouse or another individual, in your name only, or in your trust’s name. The type and amount of any debts and the names of the individuals or institutions to which they are owed.
- Account numbers and locations.
- Important records. The bills you typically pay each month, your Social Security number, your marriage certificate, and benefit information.
Many people plan to “get to these later”, but oftentimes the tasks end up neglected and uncompleted.
Remember that the care of your finances and your family can exceed your life, but only if you take action while living to make sure these basics are covered.
Planning for the unexpected: What your loved ones need to know [Vanguard]
— FREE MONEY FINANCE
(Photo: Getty)
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@Cattivella: Sorry.
I get very irritated by people demanding pet trusts from me when they’re not available in my state and then getting all up in my face like it’s my fault. I wish some of these morning shows would emphasize “in SOME states” a little more when they tout them!
But what do you do if you’re not a million years old with kids and responsibility and stuff? If you’re an over-18 independent student with not many assets and a lot of student loans, for example? Are my parents going to be stuck with my debts, or paying for an expensive funeral because I don’t have a retirement plan?
@BytheSea: Generally your debts die when you do, unless someone else was a party to the debt (as in, their name’s on it too) or you’ve done something complicated or have guarantors or something.
What happens first is that the debts are balanced against the assets of your estate, and your executor or administrator is responsible for going through and paying those off (in a particular order, if there’s more debt than asset). I think this is what causes confusion, since people usually say “the executor is responsible for paying the debts” and leave off “with the estate’s money.”
Federal student loans at death are specifically covered here: [studentaid.ed.gov] . I don’t think your parents or your estate has to deal with them at all. Loans on which your parents cosigned or private student loans will be different.
In theory your creditors could try to force your estate to sell off your personal property to satisfy your debts, but I’ve never seen that happen with a small estate, so your stuff will probably go to people who want a remembrance of you, as decided by your parents (if you have no will, they’ll end up administering your stuff).
They WILL be stuck paying for your funeral and burial/disposal. Well, SOMEONE will be, and presumably your parents are not going to leave you in the morgue.
While you probably do NOT need a will at this age (unless you have a lot of assets, a closely-held small business, or children), what you may want to acquire is a Health Care Power of Attorney and possibly a living will. In most states, if you are an unmarried adult with no children and living parents, your parents are your medical decision makers if you turn up unconscious at the hospital, but generally for full-grown adults, if there isn’t a spouse, the hospital gets a little antsy and may want to have the court approve the surrogate decision maker. So a Health Care Power of Attorney is a useful thing to have.
Most states have a “statutory short form” (or called something similar) for Health Care PoAs and for living wills (and DNRs too, usually), which you can find online in the state’s laws. (Or by googling “statutory short form health care power of attorney STATE”.) You can complete the statutory short form yourself (I’d pull it into a word processor and clean up the formatting, but some states have nice-looking forms you can get at the courthouse or library. Mine, you copy/past from the statute and it’s ugly looking); you don’t need an attorney. You’ll need to get it witnessed and possibly notarized, which you can do at your local bank, or often in your HR department. There are usually very complete instructions to help you do it properly.
My state’s POA law is here: [www.ilga.gov]
If you click on Powers of Attorney for Health Care and then scroll down until it begins screaming in all caps (Section 4-10), that’s the statutory short form for Illinois. (The all-caps parts are instructions; the standard text is the legal document.) But a quick google reveals that the helpful folks at the department of public health have made a prettier PDF version: [www.idph.state.il.us]
You’ll note in Illinois you don’t need a notary, and you only require one witness.