THE PAPERWORK GRIEF OF DEATH!
Dying is not just an emotional event in our life, it is a major financial event as well. Consider the following possible financial consequences of your death:
- The paperwork and legal procedures required to settle your estate can cost your family four to eight percent of your net worth.
- If probate is required, your family’s inheritance can be delayed for months, and in some cases, several years. During the probate process, the courts decide when your family can sell your personal residence. Even though your children can’t afford to pay the mortgage.
- Contract law may override the instructions in your Will or Living Trust
- Giving your share of your estate directly to your spouse may cost your family hundreds of thousands of dollars.
- If you or your surviving spouse die without a will, most state intestate laws do not provide for stepchildren.
- Naming a minor child as a beneficiary can subject the supervision of their money to the probate court. For a fee.
- Giving money directly to a minor child with special needs can make the child ineligible for government benefits.
- Your business may go out of business because no one know how to access digital records.
- The beneficiary choice of per capita or per stirpes may accidentally disinherit a grandchild
- Your choice of a beneficiary for your 401(k) or IRA retirement accounts can dramatically change the after death tax deferred value of these accounts.
- If you don’t have long term care insurance, you must use your assets to pay for long term care. There may be no assets when you die.
- Life insurance proceeds may be part of your taxable estate. If your estate is subject to the federal estate tax, almost half of the life insurance proceeds may be needed to pay the estate tax on the insurance proceeds.
When someone dies, a series of laws and rules determine who has the legal authority to manage the decedent’s financial affairs.
These rules and documents also determine your beneficiaries and the cost, time and effort it will take to settle your estate when you die. Planning now will save your family money later.
These resources are useful when making plans to keep your money when you die: