Our own mortality is a truth that each of us must eventually come to accept; it is as much a part of growing up as anything else. While most people
accept that they will one day leave this life, surprisingly few ever make arrangements for it in advance. The time to prepare for this eventuality is
not when you are old, have lived a full life, and are ready to meet your fate; it is today. You could die before the end of the day, and statistically
speaking, it's almost a certainty that one of you will. Are you prepared?
I'm going to walk us through the process of preparing for the ultimate Situation X, our own demise, in the form of questions, starting with the most
obvious one:
Why Bother?
"I have nothing of real value, my survivors can split it as they see fit, and I won't care once I'm dead, anyway."
Most people go off of these three assumptions when they choose not to prepare for the inevitable. Unless you are a single, childless, familyless,
apartment renter, with no friends, and no one to even so much as identify your body, then that statement is ridiculous. And if you are that sort of
person, then perhaps the biggest preparation you need to make for the inevitable is a thorough examination of your life and corrective action to
remedy it.
If you die without a will and have no living spouse at the time of your death, then your property is seized by the state upon your death, your
accounts frozen, and the process of "intestate succession" will tie up all of your assets in probate until such time as someone goes to court and
pays the probate fees, which can range from 3-7% of the total estate cost assuming there are no contests to the property. Even with a will,
your estate (the total of all your accounts and property), will probably go to probate unless you are married and have a living spouse at the time of
your death. If no one pays probate, your assets are forfeit to the state.
Your funerary expenses alone will, at barest minimum for only cremation and
the remains dumped in a Folgiers coffee can will run several hundred dollars at least, which, if you want your remains to go anywhere specific
(including to a relative), they will be required to pay.
Your children and wards will go to protective services, where they are juggled around from foster home to foster home until a judge dictates which of
your relatives are fit as a parent, or if there are none, your child becomes a ward of the state until such time as they are adopted or turned out
onto the street.
Even if you have a spouse, the chances are fair that in the event of an untimely death, that you both die at about the same time. Even if you are
survived by a spouse, there may be a number of accounts, phone numbers, access codes, and so forth, that are unknown to your partner, and so they may
not be able to claim survivors benefits in a timely fashion, or for that matter, assistance with the bills or compensation from the insurance
companies.
Finally consider that you might not "just die," you might just end up in a completely vegetative state. With no living will, DNR, or Power of
Attorney given ahead of time, you will be kept alive indefinitely, via machine, at enormous cost. Dignity aside, the financial ruin this can inflict
on a family is devastating:
From The New England Journal of Medicine
The costs of caring for patients in a persistent vegetative state are difficult to estimate. The cost of hospital care for the first three months is
estimated to be $149,200. The estimated cost of long-term care in a skilled nursing facility ranges from approximately $350 per day ($126,000 per
year) to approximately $500 per day ($180,000 per year). For children in a persistent vegetative state, the estimated annual cost of care at home is
$129,000 (±$51,000) for the first year and $97,000 for subsequent years.
So, your absolute best-case scenario for suddenly dying with no Final Arrangements is that you incur hundreds of dollars worth of expense, and a lot
of heartache and paperwork hunting and lost benefits for the person you love the most. The worst-case scenario is that enormous fees and expenses
accumulate, with zero payout in some cases, and that those who depended on you for their care end up shunted off to a miserable existence as a state
ward, and you lay in a vegetative state indefinitely, perhaps for years on end, racking up costs your family can never hope to repay.
Either way, hopefully I've made it crystal clear that you need to start your preparations now. To not do so is selfish almost to the point of
criminal negligence towards your family.
How do I start?
Even if you are currently married, the first thing you need is someone you trust to act as a central authority over your affairs when you cannot
handle them. They go by different names, depending on the circumstances, such as Grantor, Executor, etc, but for simplicity sake, we'll just call
them the Executor in all aspects, in the sense that they are the one executing your wishes.
This is a tough choice, because many times people make the mistake of choosing someone they like, or just choosing anyone who will volunteer. This is
a huge mistake. You need someone who is proven to be responsible, organized, and pays attention to details. There is every possibility that you don't
know a single person who fits this profile. In that case, pick the best person you know who will agree to it, or, if you have the money, bite the
bullet and pay for a lawyer to be ready to step in and make these provisions in the event of your demise. In most cases, a lawyer is actually much
better, as you are about to see why.
Once you have an Executor, you need a safety deposit box. It costs about $30/year, and is invaluable to making sure your wishes are carried out. You
will probably get 2 keys, leave one with your Executor, and keep one in your file at home.
You now need to start a hard-copy file, with a duplicate of all of the following:
driver's license,
birth certificate
social security card,
marriage license (if applicable)
all deeds/titles to all property, houses, vehicles, etc. (don't overlook secondary vehicles like boats if applicable)
An explanation of each deed/title: on land properties, for instance, do you have the mineral rights? If not, who does?
all insurace policies (each one clearly marked with your policy number and the claim line),
a list of every financial account you have with the account numbers (along with their customer service lines),
every Human Resources point of contact for your employer, along with your employee ID and PINs to claim 401k, IRA, Pension, Life Insurance, and
any other claimables through your workplace.
a spare set of keys to every vehicle, house, apartment, lockboxes, toolsheds, cabinets, etc.
a comprehensive list of your significant estate items (significant=cars, houses, antiques, appliances, etc. Not your "Best of the 80's" CD
collection).
your will, signed and witnessed
your living will (sometimes also known as a DNR), signed, and witnessed.
a list of every email account, voice mail, etc, so that your message can be changed to reflect your demise and the service eventually cut off.
a list of every service you subscribe to (like cable, internet, water, electricity, postal service), and the account number needed to switch the
service off.
a list of any wards you have (including pets) along with who has agreed to care for them, and the new caretakers contact information.
your tax returns for the last seven years, along with any other important tax documents (like debt-payment receipts, etc).
the name and numbers of your family doctor, lawyer, and a list of essential family and friend contacts (like parents, best friend, etc).
a list of individual items of sentimental value that you want to go to specific people.
a list of any investment accounts, stocks, equities, rental properties, etc. Think "income and/or interest bearers"
a list of significant debts that must be repaid (loans, IRS debt, state tax debt, etc)
any letters you wish to be delivered upon your death
BANKSIDE: all stock-certificates, bearer-bonds, gold, etc (obviously only one copy of this will be possible).
HOMESIDE: a log of every trip made to the Safe Deposit Box, the bank name, box number, and the key to the SDB.
There are almost certainly more things you get done, but having each of these things in your file (all of which should be able to fit in the smallest
ones), will make your passing or vegetative state a million times easier on everyone you care about.
Why two copies of The File?
There are several reasons your file should have an exact duplicate (one for the Safe Deposit Box and one for your home). The biggest reason is for
your own convenience; if you or your Executor need access to your file outside of banking hours, the Home copy allows access without waiting.
Alternately, if your executor lives far away from you, you may want to have the SDB near them, and keep the home copy with yourself. A copy of the
home file will also allow you to more easily keep your records up to date, as you can take them out once a year or so and peruse it at your leisure,
rather than during banking hours. Finally, if either location is destroyed, there is a good chance the other copy of the file will survive.
Things that cannot be duplicated (cash, gold, bearer bonds, etc) should go in the SDB. Even though banks are not foolproof against destruction or
failure, they are about as close as you can get as far as SDBs are concerned. Even if the bank fails or goes out of business, the SDB will be
transferred to another institution or the FDIC, and a record kept of this transaction. Modern banks are made to withstand enormous physical punishment
in a way that most modern homes are not. You can bet on your home being destroyed before the bank is, but even still, a record at home is a good idea.
Further, every access to the SDB is logged by the bank, so if you suspect your Executor might have stolen or accessed your information prematurely,
you can check it against your personal log of the SDB visits.
The ideal place for your home-file is in a good quality fire-safe, set into the wall, at floor-height, in the middle of the wall (not the corner). To
obscure it, put the safe in front-first, paint the back black, screw a vent-grill over the hole the safe was placed into, and put a piece of furniture
in front of it. And then, don't tell people about it, except for your Executor(s). Having a copy at home will save you from having to rush out
the SDB every time you want to look something up. Keeping a journal in your Home File of every time you've accessed your SDB provides both a safety
net in case you suspect your Executor of foul play, as well as a reminder as to how recently you updated things.
Isn't that a lot of work and money that I don't get anything out of?
That's a matter of perspective. You are looking at it from the standpoint of someone who is intimately familiar with all of your personal info,
accounts, assets, properties, liabilities, taxes, etc, and it seems like a lot of work. Now imagine if you are the poor SOB having to hunt and track
down all of this information without any kind of help from you, all the while grieving over the loss of you at the same time.
As for not getting anything out of it, I would beg to differ. Peace of mind aside, these preparations give you an enormous edge in the event of a
Situation X that doesn't kill you. If your house burns down, there's a copy of everything right at the bank. If you end up trapped in another place,
such as stuck in another country having lost your passport, there's a fully-prepared kit for someone to handle your affairs at home while you figure
out how to get back. The same goes for if you suddenly had to leave. The amount of time and stress this will save you down the road cannot possibly be
fully realized until one day you desperately need it and don't have it.
Why would they need to know all that?
They might not, but there is a situation that could arise in which case any of it might be needed. Taxes, for instance, still have to be filed for the
deceased for the tax year of their death. IRS debt must be paid, even if the person who owed it died. It will pass to the next of kin, and Uncle Sam
doesn't care if you don't think it's legal or ethical or moral to be taxed, the fact remains you don't have a choice if you want your wishes to be
fulfilled in any way other than "let the government have everything".
Additionally, the way the vast majority of these accounts go, the beneficiaries and survivors don't usually just magically get a check the day after
their benefactor dies. It is usually a long, back and forth process of paperwork, wait times, and must be initiated by the caller, not the company.
You want to give your beneficiaries as much of an edge as possible in collecting their compensation as quickly as possible. This isn't just about who
gets your TV when you're gone, it's about getting them even getting enough money to pay for the disposal of your corpse legally.
Okay, so what else can I do once I do all that?
There's a number of things. Keep in mind that "Death Taxes" will eat up roughly 40% and up, of whatever is left after probate, funerary,
lawyers, etc.
One favorite tactic for people with significant amounts of liquid assets is to gift them before you die. The death tax and gift tax is You can
gift up to $10,000 per year to an individual without them having to pay taxes on it in the forms of money or property. So if you're getting on in the
years with a hefty surplus saved up, start giving each of your children, grand children, and whoever else you want, a $10,000/year check. This has two
fantastic effects. One is that it isn't immediately whittled down to $6,000, and the other is that you will quickly become their favorite family
member.
For those not quite as wealthy as all that, you probably have some valuable pieces of furniture that you either want to keep in the family, or want
the value of it to be able to be claimed by your family. That antique dresser might make a fine gift to one of your kids. That older car you never
drive anymore might be a good "first car" gift to your grandson. The more of your possessions you can give away before you die, the less the
value of your estate, and thus, the less the cost of probate, tax, and appraisal fees.
To reduce potential squabbles over specific items, something we did in my family was to get different color post-it notepads, one for me, one for my
brother, one for my sister, and we had a day where we just went through my parent's house, and put a post-it note of our color on something we
wanted. The weak adhesive didn't damage the antiques, and we were able to give clear indications of what we wanted without overt confrontation. Items
that had multiple post-it colors on them were able to be easily mediated: for instance, my brother got an old Civil War sword I wanted, so I instead
opted for an antique writing desk that he wanted. Before the fact, it felt like a ghastly proposition to me, but in retrospect, it was a great idea
that allowed my mother and father to make sure items they wanted to stay in the family were kept in the family, and to keep my brother and sister and
I from fighting over these things when the time came. It also allowed the parents to gift us with these items over time, further reducing the
appraisal value of their estate, and as such, the fees, taxes, etc.
This was also, incidentally, how my parents figured out which of their children (me) they trusted to be their Executor in the event of their untimely
demise. Watching your children interact, what sorts of things they choose, and the questions and interest they show in the process is a pretty good
indicator if lifestyle and prosperity alone are not sufficient to judge the Executor by.
For Living Wills and DNRs, be as specific as possible. Saying "just pull the plug if I'm a vegetable" leaves way too much open to interpretation.
For instance, you might want to be kept alive for two years or so in the event of a coma, just in case you wake up, but maybe if instead your brain
was complete mush and only machines were keeping you alive, you might not want to suffer a single day off the machines. Don't be afraid to get as
personal and specific as possible. One of my more obscure wishes for instance, is that if I enter a coma, I want to stay alive until such time as my
wife decides to move on and remarry. If she does, I want the plug pulled, because I don't want to wake up and find I have no wife, no home, no money,
no support, and no life to go back to. I'd rather just pass peacefully in my sleep, and let her move on with no fear of me waking up and ruining
everything. If, however, she doesn't move on, and never remarries, then waking up 10 years in the future would, to me, be kind of like time travel,
and rather cool in some frightening ways. That's the kind of stuff you need to consider.
Finally, if you have any specific funerary wishes, make sure they are known ahead of time in detail, but be aware that funerals are not for the dead,
they are for the survivors to cope with your passing. Perhaps the most important aspect is the officiant. Make sure it's someone who knows you well
enough to pronounce your name correctly as well as your family members, but is not so close to you that they are unable to carry out their duties for
grief of your passing.
I hope this helps my fellow ATS members. I'm sure I've forgotten any number of things, but the great thing about discussing it in a forum is that we
can figure out what, answer questions, etc.
[edit on 5/12/2008 by thelibra]
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