When a close family member or friend dies, the last thing you want to think about is paperwork, and you can spare your loved ones that added stress with a bit of planning for what should be done when it’s your time to go.
After a death, funeral plans, financial arrangements and other decisions must be made quickly and can lead to some strife if family members disagree about the arrangements.
But planning your funeral services, life insurance beneficiaries, who gets your money, your home and even your pet can and usually should be determined beforehand. It’s the least you can do to make your loved ones’ lives a little easier when you die. Here’s what you need to know.
If your death will cause a family member serious financial suffering, you may want to have life insurance if you don’t already have it. With it, when you die, your family gets a death benefit which can cover funeral costs and your unpaid debts as well as their day-to-day living expenses, college tuition and other costs for which you might have covered when you were alive.
“Choose your beneficiaries carefully, and make sure you update your policy as soon as anything changes” including marriage, divorce, the birth of a child or grandchild, or the death of a beneficiary, says J.D. Power and Associates. And if any of your beneficiaries are under 18, you should designate a guardian or trustee to manage those assets, J.D. Power says.
Luckily for your heirs, the death benefit isn’t taxed by the federal government, the IRS says.
Planning your own funeral entails much more than just deciding whether you want a traditional burial or cremation.