Handling Estate Issues
The best time to handle the "big issues" such as life insurance and estate planning is when you are feeling fine. We recommend that you make it a matter of routine to revisit your life insurance and estate planning needs every so often. Revisiting your estate issues shouldn't worry you any more than your twice-yearly dental exams.
Life insurance is important. The money from a life insurance policy can go a long way in making sure the dreams you have for your family can be realized, even if you're not around. At the same time, you don't need to buy an extravagant amount of life insurance.
So, how much life insurance is enough? The answer is not precise. Much depends on factors such as:
- Are you single or do you have a spouse or partner?
- Does your spouse or partner work and is he or she self-supporting?
- Do you have any children?
- Do any of your children have "special needs," such as learning disabilities or serious health conditions?
- Do you have elderly parents who rely on you for financial support?
- How much money do you have set aside in relatively safe investments?
After answering these questions, you should be able to determine how much life insurance is realistic--and necessary.
For many people, their employer provides their only life insurance policy. If this is true for you, look into a private life insurance policy--especially if you are married or have children. You probably will need more life insurance than the amount offered by your employer.
If you have been diagnosed with epilepsy, you may not be able to buy life insurance at standard rates. Your employer may allow you to buy additional life insurance through its insurance carrier--above the amount the company provides. If you change jobs, try to convert the group life insurance policy into an individual policy.
Estate Planning Paperwork. "Estate planning" means having certain paperwork in place, including a will, durable power of attorney, health care proxy, and other documents. To draw up these documents properly, you may want to work with a lawyer. Your state bar association, legal aid society, or state attorney general's office can help you find the right person and paperwork to plan your estate.
Will. You need a will—and, if you're married, your spouse needs one, too. Your will directs how--and to whom--your assets will be distributed. You also use your will to name a guardian for your minor children. If you die without a will, your state will determine how to distribute your assets and who will look after your children. A lawyer specializing in estates should help you write your will.
Durable Power of Attorney. All adults should have a durable power of attorney. This legal document allows you to name who will handle your finances if you are unable to handle them yourself. This may mean paying your bills and/or signing your name on financial transactions on your behalf.
Health Care Proxy and Living Will. The health care proxy allows you to name a person who will make decisions about your health care if you are unable to make them yourself. The living will allows you to specify the types of medical treatment you would want or not want if you are unable to communicate these choices. All adults should have a health care proxy and living will in place.