horizontal.png

money health weekly

SIGN UP AND NEVER MISS A POST:

Hope For The Best, Prepare For The Worst

There is an old saying out there that says, "hope for the best, prepare for the worst." And what's the worst? Dying is the worst. Unless...suffering; suffering is the worst. Whatever the worst is for you, do you have a plan for it?



Estate Planning


Estate planning is, well, planning your estate. Sounds simple enough, right? It's not always that easy, though. There are many options, and each of those options has different pros and cons. And, let's be honest, nobody likes talking about their own demise or the demise of their spouse. Sometimes worse, if a loved one comes to us and want to talk about their death, we clam up because we don't want to think about life with him or her. 


It's very necessary, though, because bad things can happen without planning. I've heard many stories of a person who forgot to change the beneficiary designation on their retirement account and their ex-spouse inherited it. I've heard stories about someone in a second marriage and both of the new spouses had children from a previous relationship. When the first spouse died everything transferred to the second spouse. When the second spouse died, everything transferred to the second spouse's kids, leaving the children from the first to die with nothing - probably not what was intended. 


I want to highlight some of the major documents I hope you have, and if you don't, I hope you consider creating them. 


Beneficiary Designations


A beneficiary designation is a designed beneficiary on a certain account. Let me rephrase that in English. Some accounts, like retirement accounts, health savings accounts, or college savings plans, or insurance policies, like life insurance or annuities, let you pick who gets the account after you die. You do this by choosing your beneficiaries, which simply means the person who benefits. 


It's VERY important to understand that (forgive the jargon for a second) these accounts and policies aren't part of the probate process. Basically this means that no matter what you say in your will, for example "every single thing that I own will go to my favorite blogger, Derek," doesn't matter with an account or policy that has a beneficiary designation. Using the example of the ex-spouse above, if you choose to leave everything you own to your new spouse in your will, but forgot to change the beneficiary designation from your first spouse, then your first spouse will get a surprise gift from you. 


Will


When thinking about planning for what happens after we die, most people go straight to the will. It's such a popular document that many people equate al