It's a fact of life that we're all going to die at some point. It's not something you want to think about, but you can make things a lot easier on yourself (and your family) if you get everything in order now. Here's what you need to do.
Your inevitable demise is hopefully not on your mind too often, but it's still something you should think about long enough to get everything in order. Doing so ensures that everything in your life is organised so others can see what you want to happen to you and your things after you're gone.
If this sounds daunting, don't worry too much: being unmarried, without children and without a useful asset to speak of, I was able to get everything in order in about two hours (I still had a lawyer friend double-check everything to ensure I wasn't accidentally giving my dog medical power of attorney). The more you own, the longer it will take, but it's not nearly as time-consuming as it looks, because most of this stuff you probably have ready to go anyway.
Note: You can do a lot of this stuff on your own, but it's a good idea to speak with a lawyer about your will, assets and general estate planning. This guide is meant more to get you acquainted with terms, provide DIY options when applicable, and help you collect together what you need.
Decide What Happens After You Die
Planning for your death actually comprises of two things: what happens after you die, and what happens if you're ill and unable to handle decisions yourself. Let's start with taking care of what happens after you die, starting with your last will and testament.
Write Your Last Will and Testament
Your last will and testament is a document that designates what happens with your property and the guardianship of your children. It also names the person (executor) who carries out your wishes after you die. If you don't own a lot of property, a simple will is probably all you need.
It's possible to draft up a simple will on your own, but it comes with its own set of pros and cons. These include problems with outdated information, tax issues, and how specific trusts are handled. As USNews notes, online wills are a one-size-fits-all solution that can't always account for complicated real-life situations. However, if you only need a very basic will Legal123, Australian Will Kits or Legal Kits all provide a simple template for doing so for between $30 and $60. These laws and requirements change often, and if you don't do it right, you might unintentionally give someone more power over your estate then you want. Most simple wills have just a few sections where you can say what happens to your assets and designate who gets any property you own.
When you're drafting up your will, you'll also name your executor. After you die, this is the person who handles your estate (all of your property), finances, debts and everything else. It should go without saying this is a person you would trust to handle your estate when you're alive. Once you die, a probate court will officially give power to your executor to handle your affairs. They do not have control over your estate until after you die.
Finally, to make the will legally binding, you'll usually need to get signatures from at least two witnesses (who aren't beneficiaries listed somewhere on the will), and it's advisable to get it notarised by a notary public. You can usually find a notary public at courts of law, and they act something like an official witness for legal forms.
If you have a lot of assets that you want to designate to multiple people, you should speak with a lawyer about getting a more advanced will written up. Things start getting really tricky when finances are involved. If you have a lot of assets, it's worth at least consulting with a lawyer. I spoke with lawyer Elizabeth D. Mitchell of Ambler & Keenan about the basics of what you can expect from an estate planning firm:
I usually start people out with a form and have them think about who they would name as their power of attorney. From there, we'd look at their assets and arrange for special circumstances. It's important to remember that estate planning isn't just what happens after death, it's also about what happens if you're incapacitated... What I always tell people is that it costs more to clean up a financial mess afterwards then it does to plan ahead.
Mitchell also adds that although it takes a little time to get everything in order, most estate planning lawyers offer some type of free consultation before they into your plan. This is because once they set up a plan with you, you'll be dealing with them for the rest of your life, so it's important to know exactly what you're getting into. Mitchell also recommends people at least speak with a lawyer about writing up their will even if they don't own a lot of property, because it's possible a single mistake could mess everything up. As the New York Times points out, something as minor as not declaring the will out loud could make it invalid in some places. A lawyer is also handy to set up trusts so your family gets paid out. According to the Wall Street Journal, trusts are increasingly important:
Rick Law, founder of estate-planning firm Law ElderLaw LLP in Aurora, Ill., says estate planners increasingly recommend revocable trusts in addition to wills, since they are more private and harder to dispute. "Every will is like a compass that points toward the closest courthouse," he says.
A revocable living trust can be changed anytime during your lifetime. After you transfer ownership of various assets to the trust, you can serve as the trustee on behalf of beneficiaries you designate. Provided you do so, there aren't any ongoing fees.
That said, if you don't own that much, or you don't mind leaving it all to one person, the whole process of writing out your own will takes about 20-30 minutes. Picture: Ken Mayer/Flickr
Outline the Funeral or Memorial Service
Obviously, this step is optional, but if you want something specific to happen at your funeral or memorial service after you die, it's a good idea to get it in writing and let your family know your wishes. Doing so gets rid of the headache of planning for your family and ensures you get what you want. You don't need to go in and plan everything out, but here are a few things worth considering:
- If you want a burial, you need to find a grave plot. You'll need to contact a local cemetery and purchase a plot if so. If you want a specific cemetery or plot, the earlier you do this step the better.
- If you want cremation, you'll work with a funeral director, so contact a local funeral home and arrange any details with them.
- Decide if you want to pre-pay for any arrangements so you don't have to worry about your family paying for anything while they wait to get access to your money. Since the average funeral is around $5000, it might be helpful to pay ahead of time.
At this time, you can also decide if you want anything specific in a memorial service, how you want the wake handled along with everything else. It's also common to add these details to the will if you want to make sure your wishes are followed. Obviously, this is a very personal event, and what you want depends a lot on your religious and social background. It's a good idea to make your wishes known to family members to take the pressure off them when the time comes.
Designate What Happens If You're Ill or Incapacitated
Just as important as what happens after you die is what happens if you're ill, incompetent or incapacitated. For this, you need a living will, a power of attorney and a medical power of attorney. If it sounds a little scary, don't worry, because it doesn't take a lot of time and you'll know that you'll only get the medical support you want.
Designate a Power of Attorney
A power of attorney is the person who can attend to financial or legal matters if you fall ill or are unable to handle them for yourself. It's a good idea to choose a power of attorney so that they can attend to your financial and legal issues immediately after you fall ill. The power of attorney expires when you die, and the control of your finances typically shifts to the executor you named in your will. In some cases, this is the same person.
You have a lot of choices for different types of power of attorney, but experts typically recommend an enduring power of attorney. This type of power of attorney goes into effect immediately after you sign the documents and lasts until you die. Essentially, when you sign it, your power of attorney will have immediate access to your finances and legal matters the second you're declared incompetent or incapacitated.
The form to designate a power of attorney varies by state. If you want to do it yourself, you can get a document from the same services where you did your will (Legal123, Australian Will Kits or Legal Kits). If you're giving one person complete control over everything, you can probably fill this out yourself, but if you want to limit what that person can do, it's best to consult with a lawyer. Picture: Andy on Flickr
Prepare a Living Will
Your living will (aka advance health care directive) outlines your wishes for medical care if you're in an accident and can't speak for yourself. The information you provide ranges from resuscitation guidelines to whether or not you want dialysis.
Every state has different paperwork for your living will and different guidelines (you can grab paperwork for Queensland, NSW, Victoria, South Australia and Tasmania here). Each form allows you to designate what type of medical care you want to receive if you can't speak for yourself, as well as designate if you want to donate any of your organs to science. When you're finished, keep a copy for yourself and give copies to your doctor, a family member and your lawyer. Additionally, if you do not want CPR or ACLS, you want to fill out a Do Not Resuscitate order with your doctor.
The living will and enduring power of attorney forms are important for everyone to fill out. I did mine in about 10 minutes. With these completed, you'll have the peace of mind that you'll get the medical care you want (or don't want) in just about every circumstance. Again, a lawyer is helpful here if you're unclear about anything. If you're not sure what type of treatments you'd like when you're incapacitated, you should speak with your doctor. Picture: Social Innovation Camp
Organise Your Finances, Life Insurance, Bills and Debts
While the bulk of your assets are distributed on your will, you still have a lot of financial obligations out in the world. Naming an executor on your will and a power of attorney is just one step. You've probably already done this, but it's also important to get all your finances organised so your family can actually find what they need.
Two of the most important documents are your life insurance policy and retirement plans (as well as pensions and annuities), because both are easy to overlook. It's also a good idea to gather together all your debts (especially big ones like your mortgage, car loans or credit cards) in one place so your family can pay your bills for you while they figure everything else out.
If you have a lot of sources of income, meet with a financial advisor to get everything organised. With your financial advisor, you can set up beneficiaries, make your accounts accessible and create spending plans for your surviving family.
Secure Your Digital Life
It's increasingly important to also hand over the keys to your digital life when you're preparing for your death. We have a guide for getting everything organised that's easy to follow.
The reason this is an important step is not just to give your family access to your bank accounts, it's also so they can shut down services you don't want around. For example, Facebook can memorialise your page if you want, but you might make a request to your family to delete it outright if you don't want that digital record sticking around. Likewise, if your family wants access to your Google account and you don't provide the password, they'll need to provide a name, address, photo ID, email and death certificate. As you can see, it's a lot easier for your family if you just give them your passwords.
So, when you're putting together your list of usernames and passwords, include instructions for how you want those accounts handled, including if you want them to do anything specific with your home computer. It might seem a little weird, but if you want control over how your digital life is handled after you die, this is the only option. If you're using a password manager like Lastpass then you can just look in your password vault for a full list of all your accounts and passwords. It only takes a couple of minutes to copy the ones that really matter.
Set Up a Master File of Everything
Once you have all your paperwork sorted, wills filled out and everything else, it's time to pack that all into master file you share with a close family member or friend. Remember, this includes everything about your life, so keep it in a safe place (or in a safe deposit box) and share its location with your family. After completing the steps above, you should have everything in order, but here's what you should include (list culled together from UC Berkeley, the em, and our own "In-Case-of Emergency" document):
- Letter of instruction
- Birth certificates
- Marriage certificates
- Citizenship papers
- Divorce/separation papers
- Adoption papers
- Passports (numbers and expiration dates)
- Driver licences (number, expiration dates)
- Military records
- Names/address/telephone numbers of healthcare professionals
- Healthcare proxies/living wills
- Medications (dosages, name of prescribing doctors, pharmacy, address/telephone
- Address and phone numbers of hospitals of choice
- Medicare numbers
- Social worker or caseworker names and contact information
- Passwords, websites and other digital information
- Income sources
- Financial assets (institution names, account numbers, address/telephone, form of ownership, current value) of cash, bank accounts, stocks, bonds, mutual funds, money market funds, superannuation, annuities, life insurance
- Real estate (property addresses, location of deeds, form of ownership, current value)
- Other assets (location of items/titles/documents/form of ownership, current value) including automobiles, boats, inheritances, precious gems, collectibles, household items, hidden valuables/items in storage, loans to family members/friends
- Liabilities (creditor institutions, address/telephone, approximate debt of mortgages, personal loans, credit cards, notes, IOUs).
- Trust documents
While some of these records need to be physical copies (like your birth certificate), contact info, a copy of your will and property information can be digital, so use whatever system you're more comfortable with. Whatever you decide, keep everything organised in a folder together, and let a family member know where everything is.
If you need help getting everything organised, web apps Everplans and Get Your Shit Together are great resources that guide you through more of the specifics. As always, if things get too complicated, don't hesitate to contact an estate planner for help.
Thanks to Elizabeth D. Mitchell of Ambler & Keenan for taking the time to talk with me about what to expect from an estate-planning law firm.