End of Life Planning: The Unfinished Business Checklist for Your Family
No one wants to leave this world with unfinished business. But in all reality, it happens. We never know when it is our time to die. It could be tomorrow, or it could be many decades from now. What do you want to leave your friends and family when you are gone?
Family is often left scrambling after the death of a loved one, whether it is an expected death or not. Why? Because there was unfinished business that was not considered. Unfortunately, your family is left to wrap up your life when you are gone and finish what you cannot. Make sure they are left with the best possible instructions to do so.
Estate Planning
Estate planning is one of the most important things you can do to help prepare your family after you die. An estate plan is a plan you make to ensure your assets and responsibilities fall into the right hands after your death.
It not only makes sure your wishes are honored, but it minimizes legal issues for your family after your death. Without an estate plan, your assets can get tied up in a legal battle that can last for years to come.
To begin estate planning, consult a legal and financial professional. Make sure you list out everything you own and all your financial assets and liabilities.
When to Start Planning
It is never too early to start planning for the end of your life, as nobody knows what will happen tomorrow. An important first step is to speak to an estate lawyer who can help you create a will, establish a trust, establish powers of attorney, and guide you with other tasks.
Secondly, we recommend that you start comprehensively organizing your information and alerting a few trusted individuals of the location of this information.
And lastly, it is important that you start communicating with your loved ones about your end-of-life and funerary preferences so that they are aware of and can honor your wishes.
Adam Zuckerman from Buried in Work
Buried in Work features an estate preparation package that lets you know everything you need for estate planning and organizes it in nice, neat binders with a fire- and water-resistant file organizer.
Revocable Trust
Probate is a legal process that involves validating and administering a will after a person dies. Probate is often a long and complex process that can take months or even years to complete. However, there are ways to avoid probate.
Assets held in a living trust do not need to go through probate. A revocable trust is a type of living trust. With a revocable trust, you still have full access to your assets until the time of your death. However, a revocable trust ensures your family or whoever you designate as your successor will receive your assets much faster than with probate.
Finances
“Many Americans fail to inform their families about crucial financial matters such as bank accounts and ongoing debts, which could continue to burden the deceased after their passing. Additionally, many fail to communicate their end-of-life wishes and funeral preferences. This places the burden of these difficult decisions on family members with potentially conflicting views.”
When someone dies, their family needs to know where to look for their assets, especially their finances. List out where all your financial assets are and where they are located. This could be the name of the company or bank they are held at, account numbers, and any other details you may have.
Types of financial assets to consider include:
Checking accounts
Savings accounts
Savings bonds
CDs
Stocks
Cryptocurrencies
Cash
Retirement funds
Investments
“Organizing your information and clearly documenting your preferences and instructions before your passing is one of the most important acts of service you can perform for your family. This will help your family organize and pay for a funeral, access important information about your bank accounts and other investments, and inventory and distribute your assets in line with your wishes. Ultimately, this will save your family significant time, money, and emotional energy during their period of loss.”
Debt
Many people think when they die, their debt simply vanishes. This is not the case. Your debt can be passed on through your estate. The executor of the estate oversees paying off remaining debts after the death of the creditor (the person who borrowed the money). When you die, your debt is commonly paid off from the money in your estate. This is why it is important you have all of your debts laid out and organized. This will ensure the executor of your estate knows exactly what needs to be paid off.
On the other hand, you should also make note of anyone who owes a debt to you. If you have loaned money to anyone, the proper documentation should be included in your estate plan. This ensures this debt will not go unpaid in the event of your death.
Taxes
Do you have to pay tax on money or items you inherit? That is a very complicated question that depends on a multitude of factors. There are some states in the United States that have an inheritance tax. However, there are exemptions and exceptions to these taxes. There are also a few ways to avoid major taxes if you set up your estate properly.
If you do not want your assets to get taxed after your death, there are a few ways you can set up your estate to eliminate or reduce the taxes. These include:
Gifting
Gifting is something you can do before you die to avoid tax. You can give yearly gifts to people, or you can pay for someone's tuition or medical expenses directly. There is a limit to the amount you can gift someone per year to avoid paying taxes on it. You can utilize gifting if you have a sizable estate that you would like to reduce before your death.
Trusts
There are two main types of trusts: revocable trusts and irrevocable trusts. The main difference between the two is that revocable trusts are still controlled by you while you are alive, while irrevocable trusts cannot be touched until your death. Irrevocable trusts are not taxed, but revocable trusts are taxed. If you do not have a need for this money, an irrevocable trust is a simple way to avoid taxes being taken out of your family's inheritance.
Charitable Donations
A charitable donation is not taxed if you choose to leave your estate to a charity. However, not just anyone can receive a charitable donation. The charity must be a qualified 501(c)3 organization in order for taxes to be avoided. Donations to charities are not limited. You can choose to donate all or just a portion of your estate to charity without paying taxes on the assets.
Family Limited Partnerships
A family limited partnership is a type of account that can be used to house assets for a family business or for estate planning purposes. Many people use family limited partnerships to preserve generational health. Money transferred into a family limited partnership is not taxed. However, family limited partnerships are very complex and must be managed by people in the family. An estate lawyer can help you decide if a family limited partnership is ideal for your family.
Documents
Will
A will is the most common document people think of when estate planning. A will not only names an executor for your estate but also explains how you would like your assets to be distributed. It commonly includes information about pets and children and who will become their guardians.
Durable Power of Attorney
A durable power of attorney is someone of your choice who would control your finances if you became incapacitated.
Healthcare Proxy
A healthcare proxy is a person you designate to make your medical decisions if you are unconscious or unable to express your wishes. You should make sure your healthcare proxy is fully aware of your medical wishes and any major medical conditions you have.
Guardianship Designation
If you have children who are minors or dependent adults, you will want to create a guardianship designation. This ensures that they are taken care of by people you trust and the people you choose.
Letter of Intent
A letter of intent is a document that provides information that is not commonly included in legal documents. This could include preferences on funeral arrangements, letters to loved ones, and giving clarity on anything in other legal documents.
Pet Instructions
Pet instructions can be included in your letter of intent or separately. You need to think about not only who will look after your pets but how they will look after them.
Things you could include when considering the care of your pet are:
Type of food
Veterinary contact information
Vaccination records
Any other special treatment they need
Check out this article from Petfinder for additional information
“We’ve observed that many wills and trusts omit instructions for the care of the deceased’s pets after their death.”
Subscriptions and Automatic Payments
What subscriptions do you have, and what automatic payments do you have set up? If something were to happen to you, your family would have to manage these things. They will need to know what comes out of your finances every month or every year.
To avoid confusion after your death, make a list of your subscriptions and automatic payments. Include any relevant information, such as account numbers and passwords they may need.
Social Media
Do you use social media? Do you have an online presence? Whether you have five friends or 5 million followers, they would want to know if something happens to you. Make a list of any relevant social media sites you use and include the username and password. It can make a world of difference to your family and friends after your death.
Swedish Death Cleaning
Going through someone's belongings after they die is a daunting task. People can have accumulated decades' worth of belongings. These belongings will all need to be sorted through after their death.
Swedish Death Cleaning is a term that was created by author Margareta Magnussen in her book The Gentle Art of Swedish Death Cleaning: How to Free Yourself and Your Family. Swedish Death Cleaning is the organization and decluttering of your belongings to reduce the burden on your loved ones. You decide what is significant and what you need and use. Swedish Death Cleaning doesn't mean you are going to die soon. You can do Swedish Death Cleaning to declutter and organize your space.
The basic things to consider while doing a Swedish Death Cleaning are:
Go through clothing
Do a digital declutter and organize important digital documents
Gather important paperwork
Go through and sort sentimental items
Start working your way through larger furniture items
Social Media Accounts
According to Law Mother each social media platform has its own rules for dealing with the accounts of deceased users, ranging from permanent deletion to transforming accounts into places for mourning and memory. Understanding these options is essential for managing digital assets responsibly and respecting your wishes.
Items to Pass Down
What items do you want to pass on to others? This could be anything from your family recipes to the salt and pepper shakers your kids have been arguing about. Some items to consider include:
Jewelry
Family stories
Recipes
Antiques
Keepsakes
These items don't necessarily have to have monetary value. However, if they do have monetary value, it might be something you want to add to your will.
Where to Store Your Information
All of this seems like an overwhelming amount of information. So, where do you keep it all? Having all of this information in one place not only makes your life easier but also makes your family's life easier after you are gone.
An end-of-life planner can keep things simple and organized. There are many different DIY options available online, and you can purchase one as well through sites like Buried in Work.
“Creating your end-of-life plan is not a one-and-done. People’s life circumstances, preferences, religious beliefs, and health are constantly changing. We recommend that you revisit your plan regularly and continually discuss your preferences and wishes with your loved ones.”
Helpful Planning Tips:
End-of-Life planning doesn’t have to happen all at once
Consider tackling one ‘to-do’ quarterly until you’re done
Encourage friends & family to participate in their own planning for community and accountability
Don’t forget to update your plans after major life events or approximately every 10 years
Written by: Elaina Lilienthal
