Posted on February 8, 2016 by Liza Chalaidopoulos-Isaacs
Estate planning isn’t something more people look forward to. And even though leaving behind loved ones is a reality for all of us, dealing with the mere idea of loss can be paralyzing. Below are a few tips and tricks to help navigate your estate and your family’s future.
Will vs. beneficiary
A will deals with your estate (grandma’s china, your old Thunderbird, the contents of the safety deposit box) and is managed most likely by an attorney. A beneficiary is a person or persons who receive funds through the payout of a life insurance product. A will and a fund that has a beneficiary are in fact, not really connected at all, other than by you of course.
Who should I leave everything to?
You can leave your assets to anyone you like. Most people however leave it to their spouse. You can also create a primary and secondary beneficiary so that if something should happen to you and your primary beneficiary together, the money would naturally go to the secondary, most likely the children.
What are the benefits of life insurance?
Well, beyond the obvious payout, there’s the fact that life insurance isn’t part of the will and therefore pays out to the beneficiary immediately and doesn’t have to go through probate. What that means is that if there are any immediate expenses related to an individual’s passing (and there are), the beneficiary(s) have instant access to cash to help them facilitate that. All that, and life insurance is protected from creditors.
How can I let people know what’s what when it comes to paperwork?
Keep papers in an accordion file — that’s everything from the policy at the very beginning to any correspondence you have with your policy provider. Also keep paperwork up to date when it comes to the policy itself so beneficiaries can be found efficiently and in a timely manner, rather than the policy provider having to hunt them down.
When should I set it up?
The younger you get life insurance the better. We get less healthy as we get older and it’s harder to secure lower premiums. Most people get it when they buy a house or get married, however now is as good a time as any.
Source: L., Chalaidopoulos-Isaacs “Plan on it”, February 8, 2016