2 Stories From My Childhood That Convinced Me To Spend My Career Advocating For Estate Planning

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• As a child, I remember the confusion and questions inspired by someone’s death.
• Now working as a financial planner, I never want my clients’ families to be in that position.
• So I make sure they leave money behind and take care of basic estate planning.

As a paid financial planner, I have a responsibility to address all aspects of a client’s financial life, but estate planning is a particular passion of mine given the impact — positive or negative — that it can have on families.

Estate planning, I’ve found, is important for everyone, no matter how much money you have. When a loved one passes away, I believe that financial stability and preparation can allow family members to grieve in a healthy way.

In the following two stories from my childhood, some level of estate planning could have greatly improved each situation. The names have been changed and these stories are over 30 years old so I can’t remember every specific detail.

Don’t neglect life insurance, especially if you don’t have any savings

Bill worked extremely hard throughout his life and never seemed to worry about money. He had a house and it seemed like he lived quite comfortably. Sadly, he was diagnosed with cancer in his early 60s and later passed away.

Several family members began collecting money to pay for Bill’s funeral, which caused disagreements as some family members were asked to contribute more money than others. I have always been intrigued by these kinds of events. Why do people argue when they should be mourning the loss of a loved one? After working for so many years, how did Bill not have enough money when he died for our family to pay for his funeral? It made no sense to me.

Looking back, I now understand that Bill didn’t have the money knowledge. Like many Americans today, Bill likely lived “paycheck to paycheck” and maintained no level of cash savings. Moreover, he had no life insurance.

Lesson learned: Maintain a certain level of liquidity by having emergency savings, which allows family members to meet immediate costs when someone dies, such as funeral expenses. If applicable in your financial plan, also get life insurance, which can be a great wealth tool to efficiently transfer larger sums of wealth to beneficiaries. The type and amount of life insurance, and when to buy it, depends on your particular situation.

Decide what happens to your assets before it’s too late

Mark lived a very simple life and did not have considerable wealth, but he was a landlord. His home would be considered “humble”, but still having it was a sense of accomplishment given the financial challenges he faced throughout his life. He battled health issues for years and finally passed away in the late 70s.

Mark’s wife predeceased him, so there wasn’t much clarity on who would own his house as he had multiple children and there wasn’t much estate planning completed.

Some questions began to arise: who would live there? Who would be the new owner? Would the house be sold? Would each of her children receive their share of the equity in the home? I don’t remember what ultimately happened with that house, but I do remember there were some misunderstandings between family members that could have been avoided.

Lesson Learned: Provide clarity by completing at least the basic estate planning documentation:

• Last will and testament: designates who becomes the owner of a person’s property upon their death
• Living will: indicates a person’s wishes for end-of-life care if they cannot make the decision themselves
• Power of attorney: authorizes a person to manage affairs on behalf of another person if they are unable to do so themselves

There are situations where a person needs more advanced estate planning, but it is prudent to start by at least completing the basic steps. Losing a loved one is hard enough, but adding financial stress to an already sad situation can be devastating.