Getting Your Family’s Financial and Legal Affairs In Order

What would happen to your family if you or your spouse died? Take these steps to make sure your family is taken care of and has to make as few decisions as possible during their time of grief.

We all want to afford our children the best opportunities that life has to offer. We want them to know that we will always be there for them. Part of being there for them, however, is making sure that they are taken care of if something were to happen to us.

We live in a world filled with uncertainties. It’s not fun to think about, but we are not guaranteed a tomorrow. We all need to make sure that, should the unthinkable happen, our family will be taken care of. Below, I will discuss some of the key things you can do to ensure your family’s financial and legal affairs are in order.

What, Where and Who?

Who handles the finances in your family?

If you’re like most families, both you and your spouse have certain responsibilities. One of you may balance the checking account while the other handles the retirement planning. Maybe one of you handles the budget while the other handles the insurance. You work as a team to make sure that all of the bases are covered.

What if something were to happen to one of you? Would the other be able to step in and take over easily? What if something happened to both of you? Are your affairs organized enough for your successors to step in and manage things for your children?

If not, you need to spend some time getting things organized. While not a comprehensive list, a few of the things you should write down include:

• Who are your advisors, and how can they be contacted?
• What assets do you have, and what financial institutions hold them?
• What liabilities do you have?
• What insurance coverages do you have, and where are the policies located?
• Where is your will or estate plan located?

By having these things written out with a few simple instructions, you will help to avoid a great many stresses and problems at an already difficult time.

Related: What a Spouse Should Know About Your Finances

Life Insurance

When people have children, oftentimes, one of the first financial moves they make is to increase their life insurance coverage.

As a parent, I realize that our daughter is 100% dependent on my wife and me. We provide her with food, clothing and shelter. If something were to happen to my wife and me, our daughter would still need someone to care for her. Our job is to ensure that the resources are there to meet those needs. Because most of us aren’t able to set aside hundreds of thousands of dollars “just in case,” we buy insurance in order to transfer that risk onto the insurance company.

Because every family is unique, it is important to do your homework when determining how much coverage is appropriate. The main goal is to replace a person’s income when they die. If both spouses work and the amount of money you have to buy insurance is limited, cover the primary wage earner first.

Some important things to consider when evaluating your insurance needs include:

• Income replacement
• Funeral expenses
• Medical costs
• Children’s education costs
• Estate taxes and trustee fees

Make Your Wishes Known

Some things you can do to make sure your wishes are carried out:

• Using powers of attorney, detail who you want to handle your financial and medical decisions if you die or become incapacitated.
• Have a will or estate plan drafted that details who is to care for your children if something were to happen to you.
• Detail your funeral preferences and obituary information.
• Make a list of people that you want to be contacted if you die.

Life can change suddenly. By investing a small amount of time and energy into organizing your affairs, you can leave a positive legacy for family and other loved ones.

• 4 Excuses We Make for Not Having a Will
• End-of-Life Planning Everyone Needs To Do
• How To Buy the Right Amount and Type of Life Insurance at a Good Price
• 5 Financial Steps To Take When a Spouse Dies
• 5 Steps to Overcoming Estate Planning Procrastination

Reviewed January 2024

About the Author

Joe Hearn is a financial planner in Omaha, Nebraska and is co-author of If Something Happens To Me. To learn more about the book as well as how to better organize your financial and legal affairs, visit IntentionalRetirement.com.