Mortality sucks.
It most often rears its head just when you think you finally have everything working in your favor, and suddenly along comes the moment that reminds you vividly you only have so many few days on this planet and then you're gone. I've met mortality three times now in my life. Once almost kissing the front of a truck in an intersection, once being sick, and once almost being bit by a Black Mamba. The snake didn't even register as I was a kid and practically had no idea what I almost did trying to catch it for show and tell in school. However, here I am again being reminded of mortality with a medical test I received today.
And the above gets us to the topic of this article. If you know you only have so much time, or shorter, how do you plan your finances? In my case, I still have a family to take care of. While the kids are almost moved out, my partner depends on my income. So, obviously I've put things in place over my life to anticipate basic possibilities to take care of them.
Life insurance is the most logical. It provides that critical safety net after you're gone that helps pay for funeral expenses as well as giving family time to adjust to the new reality of things. From there, it's any kind of retirement assets from work as well personal savings or investment built over time. The key with all of them is to make sure a partner knows what they are and that beneficiary requirements are spelled out and kept up to date. The third big step is to have an estate plan. That's usually in the form of a will, but a trust has advantages that make it more attractive. If you haven't had time yet to think about a trust, always make sure to at least have a final will. It makes a huge difference later on if you pass unexpectedly. And, for both, it's critical to have an executor you can rely on. That's the person who has to implement the estate plan and make it happen the way you wanted, i.e. execute.
Given all the above, what's next? Well, plenty, believe it or not.
If you have debt, you want to be sure it gets addressed before someone else has to figure things out. Unsecured debt will end up being pursued in probate court against your estate if you have a sizable amount. This is the only recourse for it. However, secured debt, like home and car loans, will go after the collateral to get paid in full. That could force your family to sell a home if not anticipated or paid off by the life insurance or something else.
Obligations or promises, usually for family or close friends could come into play. If you don't spell these out in your will those folks generally won't have much say after the fact. Only a spouse can usally make a pre-existing claim usually under community property law before a will can apply when there is a marriage.
Don't depend on extended family to follow through on assumed loyalties. One of my first jobs when younger was working for a probate attorney. Family members were absolutely brutal and petty chasing after inheritance money that was left to ambiguity instead of clear wishes (ergo the will or trust). Spell out your last wishes clearly or gift your assets to those you want while living. You can't do anything about it after the fact. Which, by the way, is why a trust is so powerful. Unlike a will, a trust legally transfers your assets to those you want while you still have them. Then, if you pass early, the trust immediately transfers title. The assets don't have to wait for a probate court to confirm the will first. This is extremely powerful in protecting your last wishes as well as your beneficiaries that you chose, not someone else.
Unlike fiat-based assets, however, crypto can be a bit tricky. It's most often held in a digital wallet which one needs the keys for to access. But that's not something you want to share prematurely. So, you have to put things in place to anticipate a transfer down the road. The most traditional method is storing the critical information in a bank deposit box, which gets opened by your executor on passing. Some creative types might use programming in the cloud with encryption and a trigger, but that's fairly complicated for most to implement, and it depends on the cloud tools remaining. How often does tech change over time? A lot. Because the fragility of time and being human, at some point we all have to trust someone to take of crypto as well as our other assets. This is a personal judgment call, but if you have someone who can be trusted, they can pass your information on when needed to those intended. Or, you could change the assets to fiat while alive and avoid the issue altogether.
Modern loneliness exacerbates our issue as we get older. We have distance between each other far more than earlier generations because, with modern travel, it's common to live far away from relatives. That becomes a challenge when we get older; no one's around the help. This then creates a risk. Seniors end up relying on caretakers and helpers who, if no one is watching, can sometimes end up being thieves. Both my wife's and my grandfather were robbed right after they died by their daily caretakers. My wife's grandfather had items stolen from his house, and my grandfather's bank account was drained while he was still in his deathbed due to collusion of the caretaker and the local bank manager. Family were hundreds of miles away when the notice was finally sent out. Because of this all-to-common reality, seniors should pick at least two relatives they trust to help keep an eye on things. With age, exhaustion and even dementia onset, it becomes too easy for people to become victims in old age.
There's far more, and plenty of books cover how to plan for the inevitable. I'm just highlighting a few key points to think about. We all get older and, as Mark Twain pointed out, the only certainties in life are taxes and death. So use your time wisely. Mortality is always around the corner.
