None of us are guaranteed another day on Earth. About 10,000 of the 325,000 Americans who die of sudden cardiac arrest each year are young people, according to the American Heart Association, and even pro athletes suffer deadly traffic accidents. One of our close relatives recently discovered her 56-year-old husband dead, although a medical examination one week earlier revealed no significant health problems. Her trauma deepened as she discovered that because she wasn’t listed as a beneficiary or joint owner and didn’t know his passwords, she couldn’t access her husband’s accounts. His bank, employer, digital account representatives, and creditors refused to speak to her because of privacy laws. She had to hire a lawyer and extensively document his death and her identity to receive some of his assets. Four months later, her troubles remain unresolved.
When a sudden death occurs, the people left behind not only grieve, but also face the nightmare of settling their loved one’s financial affairs. However, individuals of all ages can document clear roadmaps for their families that will reduce stress, insecurity, and frustration if they were to die suddenly. Though it may sound eerie, I have been planning to die for 15 years. I’ve worked with knowledgeable experts on the following strategies to build security for my wife, children, and employees in the event of my passing:
Everyone dies eventually, so we should approach the topic with honesty and acceptance. Ask yourself, “What would happen if I died today?” Have honest conversations with your spouse and children about anticipated needs following your death and develop plans to provide for them and future generations.
Spouses should be aware of each other’s assets and liabilities. I have assets in many different areas and have told multiple people where to find important information if something happens to me.
Develop a will:
This document dictates who will receive your assets when you die (and who becomes the guardian of any underage children), yet half of Americans with children don’t have them, according to a 2012 US News and World Report article. If you die without a will, state law takes over and may contradict your wishes. As Saabira Chaudhuri wrote in the Wall Street Journal, “Dying without a will means losing control of how your assets are distributed.” To ensure that your directions are executed correctly, decide how you want to divide your estate amongst your loved ones and charities. Then, employ an experienced estate attorney to craft your will. Also, consider establishing a healthcare Power of Attorney, living will, and organ donor directive in case you’re incapacitated. Update every few years to comply with changing laws and regulations.
Examine all of your assets and accounts to ensure that you have both primary (your spouse) and secondary beneficiaries (such as your children or trust) in case you and your spouse die simultaneously. You must sign forms with employers, banks, life insurance companies, retirement firms, etc. to make beneficiaries legally official. Some assets, like retirement accounts, could bypass a will or probate court if beneficiaries are listed.
Place valuable properties in joint ownership:
When people die, their assets are appraised. The estate tax exemption has increased to $5 million, which benefits most families. To further reduce the IRS or probate court’s involvement in your estate, title your assets in proper names. Ownership of cars, homes, and real estate; checking and savings accounts; and anything of value should be in both your name and a trusted designee’s. Otherwise, transferring ownership after a death will waste time, legal fees, and effort.
If you own business interests, it’s important to have an operating agreement outlining what happens if you die. Without thoughtful planning, successful businesses are vulnerable to failure when their owners pass.
According to our accountant, Frank Thomas, CPA, “Working with professionals who are credentialed in estate law and appraising property or businesses can reduce IRS challenges.” We hired Thomas and estate attorney and CPA Alex Weatherly to develop trusts protecting our assets.
Buy life and disability insurance:
Seek economical, long-term policies that are price-locked from reputable companies. Many employers offer group plans at reasonable pricing.
Consolidate important documents:
Store the following in a central, safe location: wills; life insurance policies; marriage license; retirement, checking, and savings account information; birth certificates; Social Security cards; Power of Attorney; home and cemetery plot titles; employer-sponsored life insurance or disability policies; business operating agreements and contracts; signed beneficiary forms; and three years’ worth of tax returns. Add notes detailing physical addresses of any tangible assets; a detailed, updated balance sheet of assets and liabilities; and a current list of usernames and passwords for all your accounts, even things like Facebook. (We also use encrypted online service LastPass to store confidential account and password information.)
Store originals in a bank safety deposit box (cost: about $50 per year) and place copies in different locations. A spouse, close friend, relative, and/or adult child should cosign with you on the box and know where the keys are located so they can access the contents when a death occurs. It’s also a good idea to document your property by videotaping personal and business assets. Then, save the footage in a secure online location. My home burned down when I was 12 years old and we lost everything!
Plan your funeral:
Shield your family from the hardship of buying your casket, writing your obituary, and planning the funeral procession by dictating your desires in advance. We used funeral planning forms and have already purchased cemetery plots for our family members.
Live a good life:
Lead a peaceful, loving, and forgiving life so you can die without any regrets and bitterness. Don’t leave unresolved conflicts behind (especially with relatives).
Promote emotional health:
Everyone, no matter how well prepared, experiences an emotional roller coaster when a loved one dies. Generally, the stages of grief are shock, denial, pain, guilt, and anger; depression, reflection, and loneliness; an upward turn; reconstruction of one’s life and purpose; and acceptance and hope. The stages may not follow a particular order, and time spent in each varies from person to person. If you suffer a loss, take grief recovery classes and/or see a trained grief counselor to protect your emotional health. You never get over a death, but you can get through it.
The bottom line:
Life isn’t always fair, and it’s never guaranteed. We may be unable to designate when and how we die, but we can plan what happens afterwards. Hope for the best and plan for the worst, and don’t procrastinate: sudden death could affect you next!
About the Authors: Our corporate and personal purpose is to “create opportunities to improve lives” by sharing our knowledge, experience, success, research, and mistakes.
Blake DuBose graduated from Newberry College School of Business and is president of DuBose Web Group. View our published articles at www.duboseweb.com.
Mike DuBose has been in business since 1981, authored The Art of Building a Great Business, and is a field instructor with USC’s graduate school. He is the owner of three debt-free corporations, including Columbia Conference Center, Research Associates, and The Evaluation Group. Visit his nonprofit website www.mikedubose.com.
Katie Beck serves as Director of Communications for the DuBose family of companies. She graduated from the USC School of Journalism and Honors College.