Preparing for Loss – Must have ConversationsFeb 27, 2015 01:59PM ● By Joani Taylor
One of the most tumultuous things we deal with in life is the death of a spouse. It can also have some devastating financial repercussions. New York Life (newyorklife.com) reports in a recent survey that 55 percent of widows and 38 percent of widowers have to adjust to a change in income. Recently my mother experienced complications from a common surgery that resulted in nearly $400,000 in hospital and doctor expenses and ultimately ended up costing her life. While insurance did pay a portion of the bill, the unexpected costs and hardship left me realizing how much of a difference some pre-planning could have helped my dad in dealing with the untimely loss. Here are four conversations you should have with your spouse or partner to help ease the financial and emotional hardships after your passing.
Will you have enough income?
Financial advisor Michael Maddocks of Amerprise Financial, Draper (ameripriseadvisors.com), reports that people often just pick a number out of the air when they get life insurance, without really considering needed future expenses. When deciding on a life insurance plan, Michael recommends you should consider 1. The ever increasing costs of end-of-life expenses 2. Replacing lost future income and 3. Funeral expenses. However, if you are faced with an abrupt, unexpected loss, if you or your loved one endures a long hospital stay incurring significant medical bills, you may be asked to come up with a large dollar figure. How do you prepare for these possible outcomes? 1. You should have an emergency fund and 2. You should revisit the amount of life insurance coverage you have at least annually. Lastly, look into a long-term care policy. This will help pay for some of the costs of an extended stay at a care facility while preserving your savings for retirement.
A 2010 survey by the National Funeral Directors Association (nfda.org) said that 66 percent of adults would like to choose to arrange their own funeral service, but only 25 percent have already made plans for them. Immediately after the death of your loved one is not the time to be price comparing mortuaries and attempting to determine what your wishes are in regards to their remains. While it may be difficult, preplanning your funeral not only can save you money, but it will bring a great amount of peace of mind to you and your spouse once it’s done.
What are the passwords?
With the increasing number of financial accounts being managed online, the surviving spouse won’t even be able to log in without log-ins and passwords. Plus, the added security financial instructions have put into play that require you to change your password periodically make it common for a spouse to neglect to inform the other of password changes. Keep your online account information in a safe place, up to date and let your spouse know where it is.
Get your will in order:
Talk to an attorney and put your wishes in writing. If you don’t want to be connected to life support, be sure you also have a living will in place. Make sure your spouse knows what your wishes are in regards to any financial holding you have and your positions of sentiment.