“How can I provide for my loved ones when I’m gone?”
What would your loved ones do without you? It’s hard to contemplate, especially if you’re still young. However, if you’re a primary earner in your household, preparing now can help ensure that your partner, children and anyone else who depends on you can continue to support themselves even if the worst happens.
Your financial professional can help you take basic steps so you can protect your loved ones no matter where you are in your financial journey. Here are some tasks you can tackle together.
Make a will
Only a little over a quarter of people (26.8%) between the ages of 18 and 34 have made a will, according to a survey by caring.com1 and, surprisingly even fewer middle-aged and older individuals (22.5%) have taken this step. But creating a will is a great first step in planning your legacy to your family. It makes sure that your assets go to the people you want to take care of and can designate trusted individuals to take care of your children if you pass away while they’re still young. You can find will-writing software on the web, but most experts recommend that you work with a qualified estate attorney to make sure your document is properly written and executed.
If you have company retirement benefits like a 401(k) or 457 plan, or a life insurance policy, make sure that you update your beneficiaries whenever your family situation changes. For example, if you named a sibling or a parent as a beneficiary when you first signed on to the plan, you may want to change that designation to your spouse or one of your children. Assets in company benefit plans generally pass directly to your heirs without going through probate, so they can be extremely important for financial support while your estate is still settling.
Decide who will take care of your children
If you have young kids, appointing a legal guardian for them is one the most important parts of estate planning. You can do this as part of your will, but talk to the person you’re choosing first. You’ll want to make sure that they are comfortable with the responsibility and that they understand what you expect from them if they end up raising your children. A frank discussion about religious beliefs, values around education, and financial support for your kids will go a long way toward ensuring peace of mind.
Life insurance is often inexpensive when you’re young, and like employee benefit plan assets, death benefits pass directly to heirs without going through probate. Talk to your financial professional about how much your family will need to replace your income—and how much you can afford in monthly premiums.
Think about charitable gifts
In addition to providing for your immediate family, you may want to leave bequests to non-profit institutions that reflect your values—like your alma mater, the local foodbank or other worthy charities. Talk to your financial professional or an estate attorney about how to structure these gifts to maximize their value to charity, while also reducing your family’s tax liability.
Plan ahead for end-of-life care
A living will can outline how you want to be taken care of if you become too ill or disabled to communicate. Documents like a power of attorney or health care power of attorney can designate decision-making about your care to someone you trust. And finally, long-term care insurance can provide assurance that you can get any nursing home care that you require without bankrupting your family.
Make a file with all the documents your family will need if you pass away suddenly. Include the will, as well as a detailed list of assets, account numbers and instructions for accessing these accounts. Include contact information for financial professionals who will be involved, including lawyers, accountants and investment professionals. Make sure that the relevant people know where all this information is kept—and keep the files up-to-date.
Communicate with your loved ones
It’s not easy to talk about what will happen when you’re gone, but sharing information about what they’ll inherit and who will take care of them can ease everyone’s mind. No one wants to think about losing a loved one, but taking these simple steps to prepare can ease the burden if the unexpected happens.
This informational and educational article does not offer or constitute and should not be relied upon as financial, legal or tax advice, and the advice of your own such professionals will prevail over any information provided in this article. Equitable Advisors, LLC and its associates and affiliates do not provide tax, accounting or legal advice or services.
Products funding group retirement plans are issued by Equitable Financial Life Insurance Company, NY, NY. Equitable Financial and its affiliated companies do not offer tax or legal advice and are not affiliated with any school district, state agency or program. Equitable is the brand name of the retirement and protection subsidiaries of Equitable Holdings, Inc., including Equitable Financial Life Insurance Company (NY, NY); Equitable Financial Life Insurance Company of America, an AZ stock company with main administrative headquarters in Jersey City, NJ; and Equitable Distributors, LLC. The obligations of Equitable Financial and Equitable America are backed solely by their claims-paying abilities. GE-4827897.1(7/22)(Exp. 7/24)
Equitable is the brand name of the retirement and protection subsidiaries of Equitable Holdings, Inc., including Equitable Financial Life Insurance Company (Equitable Financial) (NY, NY), Equitable Financial Life Insurance Company of America (Equitable America), an AZ stock company with main administrative headquarters in Jersey City, NJ, and Equitable Distributors, LLC. Equitable Advisors is the brand name of Equitable Advisors, LLC (member FINRA, SIPC) (Equitable Financial Advisors in MI and TN)
GE- 4366982.1 (03/2022) (Exp. 03/2025)