Most of us like to think that we are invincible. Sadly, most of us (it?s probably a safe bet to say all of us) aren?t. Things happen and sometimes, in spite of how careful we are, we can be caught tremendously off guard.
The last thing you want is to leave your family stranded if something unexpected happens to you, right? Here are some of the things you can do to help your family survive financially after you?re gone:
Don?t let anybody tell you that life insurance is optional. If you want your family to be taken care of in the event that something happens to you, life insurance is mandatory. It?s never too early to take out a life insurance policy on yourself. In fact, when you set up your life insurance policy early, you raise the likelihood that it will have matured before something happens to you (allowing your family to collect the full amount of your claim).
Contrary to popular opinion, you don?t have to have or make a lot of money to qualify for a life insurance policy. A company like Best Life Quote can help you compare basic policies and figure out how much insurance you need and can afford.
Yes, it?s morbid. Still, setting aside some money every month into a ?death fund? is a good idea. Your ?death fund? is what your family will be able to use after you?re gone to cover funeral and burial/cremation expenses and any medical expenses that you might have incurred. The last thing you want is for your family to get stuck with a huge bill that will eat up a retirement fund or life insurance policy claim. Setting money aside now (even if it?s just $25 a month) can help prevent that from happening. Even if your fund can?t cover everything, it can help alleviate some of the stress associated with those costs.
A Note About Your Estate Plan
We?ve talked before about the importance of having an estate plan. The last thing you want is in-fighting over who gets what when you?re gone. Creating a plan, though, isn?t enough. Simply ?willing? or gifting money to kids or other loved ones can actually create problems for them financially.
One example used by CNBC is when a relative who is close to death, transfers the deed of her house to her kids. Having their names on the deed makes it easier for them to sell the home but, unfortunately, the simple deed transfer makes the kids liable for a bunch of tax fees since the IRS will only consider the value of the house at its original purchase price (by the recently deceased many years ago) and everything else is profit.
Make sure you work with a financial planner and set aside a ?power of attorney? to someone so that taxes and other fees don?t become problematic for the loved ones to whom you?ve bequeathed your worldly possessions.
Nobody wants to think about being gone but that doesn?t mean you can put it off forever. The last thing you want is for the people you love to be caught high and dry with no financial safety net or plan to help them figure out what to do after you?ve?moved on.