On August 9th of 2022 it will be the one-year mark of my dad’s untimely death. My Father, along with his close friend, both lost their lives in a small plane crash in Ocala, FL. Both men were avid flyers and had all the skills and experience necessary to get out of any situation. Unfortunately, on that fateful day, something tragic happened in which both men could not recover. We still don’t know exactly what happened that caused the crash, but the loss of my father and his friend is a tragedy that left two families completely heartbroken and with permanent gaping holes in their hearts. Naturally, the last year of my life has been filled with a lot of emotions, big and small. As I wrap my head around the fact that it has been almost one full year since I spoke to my dad, I have had a lot of time to reflect on his life, his impact on mine and others, and the lessons I have learned going through such a tragic time.
We all wish death was only about the grief, but as we have all experienced, or will at some point, there is the business side to death that must be dealt with. How we plan for the unknown and the unexpected can greatly impact what our loved ones go through when we eventually pass away, expected or not. As a Financial Advisor, and as the daughter of a man who lost his life too soon, I wish to share what I have learned in the last year with the hopes of influencing you and your loved ones to have a proper plan in place to keep your personal wealth management afloat.
Get a Proper Estate Plan – Especially in a Blended Family Situation
Like many folks, I come from a blended family. The complications that arise from this if proper estate planning isn’t done can be disastrous. At the very basic level, a Will is a must. Here is a great article outlining the basics. The laws in each state will dictate what happens to your probate assets if you do not take the time to list proper beneficiaries on certain accounts and identify which family member should get what. In the event there isn’t a Will, some states favor surviving children while others favor the surviving spouse. The result can be drastically different depending on which state your loved one lived in at the time they passed. I recently wrote an article outlining an example of this. Often, the conversation with your current spouse or children may be an uncomfortable one. But it is a must to not only communicate your wishes, but also legally document it by drafting a Will. There are many creative ways to structure your estate plan so that your current spouse is taken care of, and your children still benefit, or the other way around.
Along with the Will, there are other details that often get overlooked in a blended family situation.
- Personal property: If you have personal property that you have specific wishes for, create a schedule of those items and list out who you wish to leave them to. This applies to intact families as well. Keep this list with your Will.
- Access to information after your death: Believe it or not, funeral homes, medical examiners, and other services related to death can deny the sharing of information to your adult children if your surviving spouse requests it. If you wish for your children to have access to this type of information, have it in writing and let your wishes be known to your spouse.
- Access to your home and your things after your death: Being able to go through your loved one’s belongings after they pass is a natural part of the grieving process. It is often during this time that memories flood back and emotions are processed. Unfortunately, in blended families, this access can often be denied by the surviving spouse for one reason or another and precious belongings go missing or are thrown out unintentionally. Death can unravel someone’s emotions and cause them to act irrationally. If you want your surviving family members to have this right, communicate it with your spouse, and put it in writing. They may still have the legal right to deny it, but at least your wishes are known.
- Give a copy of your Will to your adult children and spouse: This is a touchy subject for many as some individuals like to maintain a level of privacy even with adult children. However, in blended family situations, it is important for an adult child to have copies of, or at least be told the location of, Wills and other estate planning documents. This can be very helpful if the dynamic changes between your surviving spouse and surviving children. You could even provide the name of the attorney who drafted them so that everyone is aware how to find all important estate planning documents. Make sure you give permission to the attorney to share this information with your children if that is the route you wish to take.
My Father kept impeccable records. It is a quality that at times seemed a bit excessive and often comical, but after his death, I am forever grateful for it. We were all able to easily look for and find important information because it was carefully organized and filed properly. Here are a few pointers as you get organized.
- For paper records: Keep a file system at your home of all important documents. Label them clearly and maintain them regularly so that information is updated often. This allows for immediate and easy access.
- For digital/electronic records: Make sure there is a master list of websites, location of files, and login information. Share this list with your spouse and/or adult child. In a blended family, it would be wise to give the information to one of your adult children along with your spouse. This includes codes for safes as well.
- For digital photos: Often this detail is overlooked. It could take months for a surviving spouse to locate and share digital photos with others. To solve this problem, use a website that allows for sharing photos online. I highly recommend you take the time to migrate pictures over so that when the time comes for your family to find pictures, they aren’t sitting on your hard drive that they may or may not have access to.
Have Adequate Insurance
Given the nature of my Father’s death, the immediate fear after the initial processing of what had happened was the potential for litigation against my Father’s estate and the costs associated with the accident. An incident of this magnitude could quickly wipe out an estate.
No matter what activities you are involved in, or what assets you own, it is imperative to have proper insurance coverage in the event of property destruction, property loss, loss of life, and liability protection.
- Property and Casualty Insurance: Having this type of insurance helps cover the things you own like your home, car, and other recreational vehicles while also providing coverage to help protect you if you are found legally responsible for an accident that causes injuries to another person or damage to another person’s belongings.
- Life insurance: Death is expensive. Often, we think of life insurance as a need to replace lost income in the event of our premature death with the goal of your assets growing to a substantial enough size in which you no longer need the insurance. However, in some cases (especially for blended families), it may make sense to maintain a very small term policy to cover the administrative part of your death so that what is left to your heirs is maximized. Funeral expenses, estate administration expenses, and attorney fees are just a few examples of costs that will deplete what is left to your heirs.
- Liability insurance: Umbrella insurance is an extra type of insurance that provides protection beyond existing limits and coverages of other policies. It can provide coverage for injuries, property damage, certain lawsuits, and personal liability situations. Rachel Roth recently wrote an excellent article on umbrella insurance explaining liability protection in greater detail.
Live a Life with Intention
One of the biggest lessons my father taught me was that life was meant to be lived rather than just something we float through. He was an adventurer, a thrill seeker, a “can’t sit still” kind of person. Every single hobby he took on, he did so with 100% commitment and passion. He raced cars and motorcycles, jumped out of airplanes, flew airplanes, climbed mountains, and traveled the world, just to name a few. His money always had a purpose. He earned a living so he could do all the things he loved. He also planned for the future by balancing his life’s dreams with the reality of retirement. As a Financial Advisor, I often think how relatable this is for Financial Planning with clients. It is an art to save for tomorrow while living for today. Many of us strive to achieve this delicate balance. By being intentional with your wealth and having your wealth serve your values, when your time comes to pass on, your family will be able to say you did it right. Below is a short list of how you can determine if you are doing right by your values.
- Determine your values: When you can successfully identify what is most important to you, only then can you define what you want your wealth to do for you. From here, goals can be created, and a solid financial plan put in place.
- Have your actions match your values: Treat your values as your north star. Every financial decision should be derived from your values. If you veer off track for one reason or another, revisit your list and get back on track.
- Check in with yourself from time to time: By revisiting your financial plan, you can make sure you are on track to continue to achieve your goals. Working with a Financial Advisor is like working with a coach as you go through the journey of life. We help clients achieve their goals through a holistic financial planning process.
I will miss my dad every single day. I am grateful that I was his daughter and for the lessons he taught me. My hope is that by sharing the lessons learned since his death, I can help another family get it all right. At ML&R Wealth Management, we can help with these tough discussions and put a plan in place that serves you and your values for the rest of your life and generations beyond.