Preparing for your death is never a nice topic. Many people avoid it exactly for that reason. And that’s where financial problems happen due to unexpected bills and a failure to prepare for what happens after death. You can prepare your parents, though. Here are some of the aspects you need to address when it comes to end of life finances.
Write a Will
If you haven’t already, you should have them write a will. This is crucial for ensuring all the family assets are divided up appropriately. It creates a whole trunk of legal complications if this doesn’t happen in the beginning. It can take many months to sort the problem out.
Here’s what will happen if you don’t have this crucial contract drawn up. Legally, the state takes over where a will doesn’t exist. At this point, the problem is on you to prove that you are the desired person to inherit. You will have to attend probate court and the process can take about a year to sort out.
This is assuming you don’t have any siblings or relatives who also want to lay claim. It can easily cost you thousands and lead to the process lasting years. Before they know it, squabbling relatives have drained the entire estate due to legal costs. Imagine if this problem could be avoided simply by having a will in place. You don’t even need an attorney to draw one up, although this is recommended.
Power of Attorney
Power of attorney can have huge financial implications. If one or both of your parents become legally incapable of making decisions, the power of attorney will state who makes the decisions on their behalf. This applies to both medical care and financial issues. Get the power of attorney issue in writing from the very beginning.
You must have some sort of coverage for funeral expenses. These days, it can cost a few thousand dollars for both a funeral and burial. If you don’t have any cover, this must come out of the estate of the family, or the next of kin is responsible for paying. It’s always better to have a comprehensive burial insurance policy setup to ensure you don’t lose a big chunk of your inheritance.
Contrary to popular belief, many investments don’t pass out of your hands and into oblivion when you die. They can be passed to the next of kin, assuming proper instructions have been setup. There are only certain investments that can’t be passed on, but they don’t include things like stocks and shares. Get a full idea of what you parents own before they pass on.
A Difficult Task
It’s perfectly understandable why this may be a conversation you wish to avoid with aging parents. Sooner or later it has to be discussed because otherwise you’ll suffer the consequences of unexpected bills and the state taking over your family assets. The earlier you can address these issues the easier it will be to manage.