Five Things to Do to Prepare for Death

Well, that doesn't sound very palatable, does it? That's probably because it isn't. No one enjoys preparing for death, but in getting your affairs together, you can save a lot of heartache and trouble for those you leave behind. And considering the emotional state they will probably be in, the less they have to deal with, the better. Here are ten things you can do to lessen their load when you do pass away.

1. Make sure your Will is up to date (or that you have a Will, period). Having an out of date Will or no Will at all (see my June 9, 2005 and June 8, 2005 posts) only increases the odds that the work for your executor will increase significantly. Is your Will clear on who receives your property at your death? What if someone predeceases you and you have made a gift to them? Is there a contingency distribution for that gift? Are all the named executors, trustees, and guardians still living and willing to serve? Has there been any changes in the tax or probate laws of your state that you can use to your advantage? Your Will should be reviewed at least every three years as a matter of course, but also if there are significant changes in your financial situation, marital status, or if there have been changes in your family as a result of a birth or death.

2. Make sure you have all your beneficiary designations up to date. Life insurance, Individual Retirement Plans, 401(k)'s, annuities, and other similiar "non-probate" assets do not pass under the Will, but instead according to the beneficiary designation for the plan or policy. Make sure that you have properly named the correct beneficiary, or that you do not need to make any changes to coincide with any changes that may have recently been made to your Will. One common mistake is that on your non-probate assets you name minor children as beneficiaries without considering the effect. If you die with minor children and you name them as beneficiaries under a plan or policy, a guardianship of the estate will have to be created for your child and administered through the probate courts. This is a costly process, and completely unnecessary. You should have a trust or trusts for your minor children created in your Will that will receive those proceeds at your death and thus eliminates the need for a guardianship.

3. Prepare a listing of all your assets and where they can be found. A common problem in estates is that the executor cannot locate all the assets easily, or worse, can never locate all the assets because there is not enough information to assist in that cause. This isn't The Da Vinci Code. Don't leave little hints and clues and expect your beneficiaries to automatically track those assets down. Write or type everything out and place it in a notebook, noting each of your assets, when and where you acquired it, and where the physical asset is located (or if it is cash or a security, the financial institution where it is held, along with account numbers). Also place in the notebook or file copies of recent account statements, tax returns, title information for vehicles, deeds for real property, names of attorneys and accountants, and copies of insurance policies. If there is a safety deposit box where you keep valuables or important papers, make sure the location is noted and where the key can be found. If you don't have an extra signer on the safety deposit box, understand that your heirs will have to get a court order to get the box drilled if you have your Last Will located there. The extra signer, like a child or sibling, might save some problems down the road.

4. Determine what you would like done with your body at your death. Morbid, yes. Necessary? Absolutely. I've seen family members fight about whether mom should be cremated or buried. If cremated, where are the ashes spread? Are any family members going to get to retain some of the ashes? If you are buried, where will it be? Do you already own a cemetery plot? Do you want to donate your body to science, or maybe just some body parts? These are all important issues, and without being too obvious, need to be addressed before you die. Let your family know your thoughts, and put them down in writing as well, so that there are no questions afterwards.

5. Write a "love letter" to your family and friends. One of the best things you can do for your family members and friends to help provide closure following your death is to draft a handwritten letter to each of those persons, letting them know how much you loved them and how much you treasured your time together. Seal each one in a separate envelope and place these in the file with your other important papers. This letter will be truly special to the recipient and will provide a great final memory of you.

Preparing for your inevitable death is not easy. But the things you do today will have a lasting effect long after you are gone.