What If Something Happened To You?
by Joseph R. Hearn
7 Ways to Save on Life Insurance
Choosing a Legal Guardian for Your Children
I've learned that being a parent is one of those unique life experiences that can be both rewarding and thankless, joyful and depressing, exciting and mundane. All that and I've only been a parent for two months. From the moment the doctor handed us little Charlotte Jane, however, one feeling that has not fluctuated is the overwhelming sense of responsibility. We all want to afford our children the best opportunities that life has to offer. We want them to know that we will always be there for them. Part of being there for them, however, is making sure that they are taken care of if something were to happen to us.
We live in a world filled with uncertainties. It's not fun to think about, but none of us are guaranteed a tomorrow. We all need to make sure that, should the unthinkable happen, our family will be taken care of. Below I will discuss some of the key things that you can do to ensure that your family's financial and legal affairs are in order.
What, Where and Who?
Who handles the finances in your family? If you're like most families, both you and your spouse have certain responsibilities. One of you may balance the checkbook while the other handles the retirement planning. Maybe one of you handles the budget while the other takes care of the insurance. You work as a team to make sure that all of the bases are covered. What if something were to happen to one of you? Would the other be able to easily step in and take over? What if something happened to both of you? Are your affairs organized enough for your successors to step in and manage things for your children? If not, you need to spend some time getting things organized. While not a comprehensive list, a few of the things you should write down include:
- Who are your advisors and how can they be contacted?
- What assets do you have and what financial institutions are holding them?
- What liabilities do you have?
- What insurance coverages do you have and where are the policies located?
- Where is your will or estate plan located?
By having these things written out with a few simple instructions, you will help to avoid a great many stresses and problems at an already difficult time.
When people have children, often times one of the first financial moves they make is to increase their life insurance coverage. As a new parent, I realize that our daughter is 100% dependent on my wife and I. We provide her food, clothing and shelter. We change her diapers and bathe her. She needs us to meet her every need. If something were to happen to my wife and I, our daughter would still need someone to care for her. It is our job to ensure that the resources are there to meet those needs. Because most of us aren't able to set aside hundreds of thousands of dollars "just in case," we buy insurance in order to transfer that risk onto the insurance company.
Because every family is unique, it is important to do your homework when determining how much coverage is appropriate. The main goal is to replace a person's income when they die. If both spouses work and the amount of money you have to buy insurance is limited, cover the primary wage earner first. Some important things to consider when evaluating your insurance needs include:
- Income replacement
- Funeral expenses
- Medical Costs
- Children's education costs
- Estate taxes and trustee fees
Make Your Wishes Known
Some things you can do to make sure your wishes are carried out:
- Using powers of attorney, detail who you want to handle your financial and medical decisions if you die or become incapacitated.
- Have a will or estate plan drafted that details who is to care for your children if something were to happen to you.
- Detail your funeral preferences and obituary information.
- Make a list of people that you want contacted if you die.
Life can change suddenly. By investing a small amount of time and energy into organizing your affairs, you can leave a positive legacy for family and other loved ones.
Joe Hearn is a financial planner in Omaha, Nebraska and is co-author of the book If Something Happens To Me. To learn more about the book as well as how to better organize your financial and legal affairs, visit IfSomethingHappensToMe.com. You can contact Joe at 1-800-905-7526 or by email at firstname.lastname@example.org. © Provision Publishing, LLC
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