One of my friends likes to tease me about my morbid posts, and this might be the worst...
It doesn’t matter what recent observation spurred the thought, but it was really bad.
Since the most important thing to me is my family, I thought my gameplan was worth writing down for Allison and sharing.
1. Organ donation wishes are clear and on my driver's license. If there is an afterlife, this is my last chance for some final credits so go all in! Plus, it’s black and white pragmatism which is my style.
2. Grief, particularly for the kids, would be tough, to say the least. I’d want everyone to remember the good times, try to honor me by being a good person and working hard, and move on.
3. Funeral plan and wishes are done and in the financial football. Financing for it is not pre-paid, just put it on a credit card and pay it off later when the bill comes.
4. Breathe – for some reason when someone passes there is often a panic to get the financial stuff taken care of. There usually isn’t anything critical that needs to be handled right away. People are surprisingly accommodating on late fees if you tell them what happened. Slow down, the decisions people make while in grief after a death can be very poor. The grief and stress won’t stop just because you got all of the paperwork done.
5. Document everything that seems like it might be important in a journal. Use the financial football folder as a repository to keep everything together, and add folders as needed.
6. Call the attorney and set up a meeting at least a month out.
a. Your estate plan will most likely need to be updated now, and there will probably be questions and things to do.
b. Plus, since I was too cheap to put our rental condo in California in a trust, and didn’t want to risk a tax assessment increase from the title change, you will have to hire an attorney there and go through probate. Get a referral from one of our friends for a reasonably priced one, or have our attorney deal with it. This will take time and up to $5,000 I’m guessing. The Texas rental will need to be dealt with as well, but I believe it will be less costly.
7. Call or email the financial advisor and send a copy of the death certificate (order 10 from the funeral director) when it comes a couple of weeks later. Consider communicating via email because it gives both sides time to think when they have the time to do so. This process is complex, and spoken things are often missed and forgotten. Accounts will be moved around, beneficiaries updated, and they will do all the paperwork. No need to worry about this team, they will look after you. Schedule several meetings, so it’s not too overwhelming, then check in at least every three months for the first year. Brainstorm with them on things you are thinking about or need help with. Triage the situation for the family, try to make sure assets are working as efficiently as possible.
8. Call the home, auto, and umbrella insurance agent and let them know to update all of the policies. You can probably get rid of one car, although you might want an extra while the kids are young for the babysitter, plus they will be driving soon. You need more umbrella coverage because of the life insurance proceeds.
9. Notify the bank, get an account with just your name on it, notify the credit cards where I’m the borrower. Consider a credit freeze or simply notify the credit bureaus to make an identity theft less likely and to make your life easier. Normally this doesn’t really worry me a lot, but identity theft after death is common. Not the end of the world if it happens, just some paperwork.
10. Contact Social Security and start getting any benefits you are eligible for. Verify the information you receive is correct.
11. Contact the life insurance companies to get your tax free money. $50,000 from my work policy, and $1.5m, and $1m. Don’t do anything with the cash, wait. Often the interest rates the insurance companies offer are very compelling, and there is no rush to pay off debt or invest the money. If the one or more of the insurance companies gives you any trouble, have our attorney deal with them. They never want to pay.
12. Set up a new budget, not only for day to day things, so you know where the money is going, but also how much you need from life insurance to spend per month. Have that money automatically deposited into your checking account. Do a cash flow plan that not only covers the day to day needs, but also what we can budget to help the kids out for college, and still allow you to retire. Stick to it, check in with the financial advisor every six months on spending and assets, make sure you stay on track. It’s easy to make small adjustments early on, but if you get too far off track, sometimes it's unfixable. I’ve seen this a lot, don’t let it happen to you.
13. Notify our CPA; she will need to update some cost basis on our rental properties, and adjust our file. Also, it would be smart for you to start using Quicken. You shouldn’t have a lot of trouble with passwords since we use the password manager.
14. Have our rental property business partners update the partnership agreements as needed.
15. Don’t sell the rental properties unless it absolutely makes mathematical sense!
I’m sure I’m missing something, but this is all I could think of. 😊
Tom Gartner, MSAPM, CFP®
This article represents opinions of the authors and not those of their firm and are subject to change from time to time, and do not constitute a recommendation to purchase and sale any security nor to engage in any particular investment or legal strategy. The information contained here has been obtained from sources believed to be reliable but cannot be guaranteed for accuracy.