Are You Prepared for an Untimely Death?

Over the weekend I learned some devastating news. A friend that I had lost touch with a while back lost her husband Saturday morning. This is a young family with 4 young children. You don’t expect news like this.

Since I had lost touch with this family, I have no idea whether they were prepared for a worst case scenario. I can tell you that I’m not. Oh, I keep meaning to get my affairs in order, but something always comes up, and it gets put off. This is a wakeup call that the worst can happen to anybody, and it’s best to be prepared.

No matter how remote the possibility seems, people…young, healthy people…die every day. Car accidents, cancer diagnoses, complications from the H1N1 virus. These are things you pray don’t happen to you, but really they can happen to anybody.

So what does a person need to do to prepare for the worst? Here are a few things to look at.

Do You Have a Good Life Insurance Policy?

If anyone else in your family relies on your income, you need life insurance. If you are a stay at home mom, and your husband would need to pay for daycare or household help if something were to happen to you, you need life insurance.

Should you get term or permanent life insurance? There are no easy answers. My husband and I went with term, but a case could be made for whole life insurance, too. A comparison between the two is another blog post that I’ll try to write soon.

How much life insurance do you need? That’s a highly individual matter. You need to figure out what you want your insurance to do. Do you want it to provide an income replacement for the long term, so a parent can stay home with the kids? Or do you want it to be a short term buffer, while the surviving spouse is grieving?

Whatever you do, have the conversation with your spouse, decide on how much insurance you need, and make sure you get it.

Do You Have a Will?

If you are a parent, this is especially important. If something were to happen to you and your spouse, what would happen to your children? Who would get custody? If you don’t have a will, the courts get to decide, and they may not make the same decision you would.

Sometimes drawing up a will can be a difficult thing, specifically because of this issue. My husband and I have a will, but it’s terribly outdated. It was drawn up before our son was born. And the only reason we haven’t updated it is that we can’t decide where we want our children to go, should the unthinkable happen to us. It’s stupid reasoning, really, because we probably wouldn’t be happy if the court were to decide where they would go.

The other important reason for a will is to decide where your assets go after you die. Again, if you don’t have a will, the court will decide. If you have everything clearly spelled out, your heirs will know exactly what your intentions were.

While drawing up your will or trust, a good lawyer will be able to advise you whether a will or trust is better in your situation and how to best structure your finances, so your survivors can most easily gain access to their inheritance.

Do You Have a Good Emergency Fund?

No matter how well your will is drawn up or how much life insurance you have, it will take time for your family to gain access to that money after your death. In order to claim insurance, your survivors will need to produce a death certificate and fill out paperwork. Then it will need to be processed, all of which take time.

If you have a good emergency fund that is held jointly with your spouse, your spouse will have money to survive while waiting on life insurance. If your emergency fund is in your name only, it will be unavailable until it clears probate, which will be of no help to your spouse. The exception would be if you had a “Payable on Death” account. But your survivor would still need to produce a death certificate before they gain access to your payable on death bank accounts, so I like to option of a joint account better.

Regardless of what kind of insurance you buy, whether you draw up a will or a trust, or where you park your emergency fund, make sure your family will be taken care of in the event of your death. I know I’m going to be going over my affairs this week.

Are you prepared for the worst?

Photo by Stephen Barnett.


By , on Oct 12, 2009
Lynnae McCoy I'm Lynnae, wife of one and stay-at-home mom of two. I'm committed to getting out of debt by being frugal with my choices in life.


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  1. Christa – Thanks for the reminder on California and probate sales! What a nightmare! My wife and I did a simple will with two people confirming. If I die, all goes to her. :)

  2. Laura:

    Quick note about a will. I highly recommend one, but even if you don’t have one, the court MAY not have to make all the decisions. If your assets are all owned jointly or have beneficiary designations, the court generally doesn’t need to be involved, other than formally filing a will.

  3. Christa:

    In California, if you own a home it’s essential that you have it in a trust to avoid probate since probate takes a substantial amount out of the estate. Granted, it seems costly to pay $1500 or more for a trust, but you’ll be saving yourself and your heirs a lot of money in the end. However, laws are different in every state. In any case, no matter where you live, Lynnae is right–be prepared.

  4. Melanie:

    I agree with having everything in one place where the only people that have access to it are the ones that you want to have access and always have a backup person!

    I am in the process of putting all of my important papers in one place (including how I want to be buried). I dont want the people that I leave behind to be left with huge burden.

  5. Stacey:

    Sorry to hear of your friends’ loss. Great topic and look forward to the life insurance post.

  6. Sorry to hear about your friends loss. It really is about getting some good employer sponsored life insurance, and term life insurance extra on your own.

    Match your life insurance amount with your liabilities! October is generally the time to reconfigure your company plan, so everybody should inquire with HR.

  7. Michelle H.:

    We finally got our will done after 28 years of marriage and grown kids! I don’t recommend waiting that long, but it was such a relief to get it done finally! I also typed up a 1 page summary of where all our accounts are along with pin numbers and put into our safe with the will. I’ll update it every year and remind hubby and kids where it’s at.
    Great post!

  8. marci:

    Make sure all your papers are where they can be found…tax records for a couple years, life insurance policies, other insurance policies, bank accounts, investments, IRA’s, 401K’s, pensions, online accounts, passwords, military records, birth certificate, marriage records, divorce records, and children’s birth records, copies of any loans, mortgages, etc….. All these will be needed, along with the will when the estate is handled.

    Make SURE your family knows where all these are!!!
    When my ex-husband died, leaving a 17, 29, and 21 year old, we had one heck of a time finding all his scattered paperwork.

    To save my kids going thru that mess again, they all know the above papers are all in a locked firebox together and easily accessible to the kids. It will save them a LOT of time and hassle when they have to deal with it for me!

  9. Darcyjo:

    As a woman who was widowed at the age of 39 with two teenage daughters, I am grateful to see someone with a public voice reminding women to take precautions. EVERYONE needs a will and an emergency fund, and anyone with children should have insurance. You don’t want to have to find out what it’s like to be widowed and not have what you need financially. Believe me.

    My daughters are now grown, and yesterday my eldest gave birth to her first child. And I have already had this conversation with her. My beloved daughter and her new baby girl should not have to go through what I went through.

  10. We each have two term policies, for different amounts, ending at different times (the larger amount ends at the later date). We had our wills drawn up a couple years ago when we were flying to Europe for a vacation. We also have Powers of Attorney, Healthcare Powers of Attorney and Living Wills. As for our emergency fund, it took a hit when I got laid off at the beginning of this year, but it’s slowly growing again and is in a joint account. I believe we’ve got a good plan in place, but hope it doesn’t have to be used any time soon!

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