Nothing can ease the blow of a loved one's death or incapacitation. However, a few small precautions can help cut down on anxiety after a loss and smooth the transition for the surviving spouse.
Here are four critical "to do" items and some suggestions on how to get each done.
Lesson 1: Even if you hate it, or your spouse is better at it, have some idea of what your bills are and when they are paid.
It's natural for one partner to be more on top of the daily household cash flow. One reader posted her family's experience on the Fools and Their Money discussion board (click here for a free trial). She wrote that her father-in-law was a CPA and handled all of the finances. "The family story is about how the one time my mother-in-law did have a checking account, she bounced several checks before she'd had it for two weeks," she writes.
To do: If you are the family CEO, schedule 30 minutes to get your next of kin in the loop so that they can take over with ease at a moment's notice. Use this as an excuse to get organized. Consider automating the process (automatic bill payments, investments) to make it easier for the partner who doesn't handle financial issues on a regular basis to keep the home fires burning in your absence.
Lesson 2: Life insurance and proper financial planning will save your family time, worry, stress, and money.
The last thing you want your loved ones to do after your death is worry about covering the next month's, let alone the coming lifetime's, expenses. More than half of Americans do not even have a will. Organized estate planning can help a family quickly find all the documents they need to file life insurance claims and access needed investment accounts.
To do: Organize your important papers and make sure everything (including beneficiary information) is up-to-date. One great resource is Martin Kuritz's The Beneficiary Book.TMF Money Advisor can also help organize your assets and make sure your family is covered in case of an emergency or the inevitable. (Click that link to try the service for free for the next month.) Remember to tell your trusted family and friends where they can find these documents. And we can't say it enough: Insure yourself properly so that your loved ones are taken care of.
Lesson 3: Imagining the unthinkable isn't enough. Put your wishes on paper.
A recent survey by legal website Findlaw.com found that just one-third of Americans have a living will, spelling out whether they want life-sustaining medical care in case they are terminally ill or incapacitated. Without that document, your loved ones or a doctor have to guess at what medical care you would like.
To do: You can pick up a copy of a living will (or advance medical directive) at virtually any hospital for free. (You'll have to see a lawyer for durable and medical power of attorney (health-care proxy)). Make sure your living will conforms to your state's laws. If you move, you may have to fill out a new living will. Findlaw recommends that consumers take care to make clear, consistent choices. The document should specify not only whether you want extraordinary life-saving measures, but also whether you wish to receive pain medication, artificial nutrition, or hydration. Store extra copies where your loved ones can easily find them. If you change your mind and revoke or change your living will, make sure you destroy all originals and copies. Also, consider appointing a health-care agent (someone who has the authority to carry out your wishes) by signing a health-care power of attorney or general durable power of attorney document.
Lesson 4: Enjoy life while you can.
Sometimes we shortchange the here and now while saving and investing for the long-term future. Retirement will come soon enough. Remember to enjoy the moment.
To do: Plan that family vacation or even that pottery class you've been threatening to take with your spouse for the past decade. Set up a short-term savings account to cover the fun stuff as well as near-term expenses.