A Weekend Project for You

60% of Americans don’t have a will. When they die, at least some of what they hope of passing on to their loved ones will be eaten up by lawyers and distributed by judges. Handle funeral costs so your family doesn’t have to. Pretty amazing what an hour of contemplation and an hour of document preparation can do.

47% of Americans have no life insurance. If they suddenly die, the people they care about most will suffer a rough road, likely losing their home and their standard of living. Pretty amazing what an hour of research, a couple hours of forms, and $50 a month can do.

71% of Americans do not have a living will. If they have a life-threatening illness or injury that puts them in an unconscious state, the choice of whether they live or die winds up in the hands of a grieving loved one, burdening them with an incredibly painful decision at a moment of their deepest need. Pretty amazing what an hour’s worth of document preparation can fix.

61% of Americans do not have enough emergency savings to make it through three months of unemployment. If one of those people loses their job in this economy, there’s an extremely good chance they’ll run out of money before another job comes knocking. Setting up an automatic savings plan at your local bank to sweep some cash each week from your checking to your savings takes five minutes and fixes the problem.

If you managed to be in the minority in all four of these cases, congratulations. You’re doing far better than the average American.

If you’re in the majority in any of these cases, I have a good idea for a weekend project for you.

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33 thoughts on “A Weekend Project for You

  1. Leah says:

    For those of us young ones, be sure to talk to your parents! I just found out that my mom has a $20k life insurance policy on me (enough to tie up loose ends, pay for a funeral, etc). Who knew?

    I do have emergency savings and am always thrown when I meet people who don’t.

    As for the rest . . . I suppose I should sit down and hammer out some documents. I’ve talked with both my parents and my serious boyfriend about end-of-life issues (eg I want to be an organ donor), but I’ve never codified that stuff anywhere. I also figured that I don’t need a will because I don’t own much stuff, but a will probably would reduce legal issues.

  2. Katie says:

    Keep in mind, all, that wills have specific legal requirements that have to be met to be valid. Just writing down what you want and putting it in a safe deposit box won’t do it. You don’t necessarily have to hire a lawyer, but you do have to look into the requirements in your state to make sure they’re met.

  3. Pattie, RN says:

    Well,DH and I are three for four…..the EF took a beating last year due to illness and unemployment, but it is being rebuild snowflake by snowflake!

    And reference all others….making a will DOES NOT make you die, Come on, only five year olds should believe in that sort of “magical thinking”. And trust a nurse who has seen it ALL…talke to your family and PUT INTO WRITING what you do and do not want done if you are very sick or terminal. You do NOT want the hospital and I deciding for you, do you??

  4. Kai says:

    It’s not that it makes you die – it’s that it makes people think about dying, which they don’t like.
    It requires you to acknowledge the fat that you will die.

    I have savings to last three months of unemployment. I do not have any of the other three.
    I am young, with practically no assets to divide, and definitely none that I care about (my sisters can fight over my computer if they really want). I have no debts to pass on, and no dependents. There is no value in a will to me. Also, Canadian laws are not near so messy about that stuff. The government will not get my money.
    I have no need for life insurance. My emergency fund would easily pay for cleaning up my rent and
    getting rid of my body.

    A living will could be considered worthwhile, but both my parents and boyfriend know my thoughts already, and I don’t see a great additional value from writing them down. My next of kin would be asked to make the decisions, and they already know the answers. The hospital would not be involved.

    These things are a good idea for most people, but as always, not all advice is necessary for everyone.

  5. K.B. says:

    A will, a living will,a nd an emergency fund – good for everyone.

    Life insurance? So, I should spend $50 a month to give someone else money after I die?

    I don’t think so.

    I have no dependants, have enough money to bury me (or rather, burn & scatter), and thus see no reason whatsoever for life insurance. I’d rather put that $50 a month into savings.

    Now, disability insurance is another thing. That has the ability to benefit *me* during my lifetime, and is a good investment, IMO.

    I’m not completely against life insurance, but it is not beneficial for everyone.

  6. WendyH says:

    Funeral arrangements (if any property is owned or payments are pre-made) should also be made know to other family members.

    Don’t just fill them out and file them, it’s also important that other family members know where the documents are in case of emergency.

    I used to work in a cemetary office and we had someone in who discovered that a parent had purchased gravesites that no one knew about, so he was buried elsewhere. The documents were found months afterwards tucked in some of the parent’s general paperwork. A document Fire-safe can be purchased for less than $50.

  7. Camille says:

    Timely post. I discovered on Friday that my hubby and I REALLY need a will ASAP. It’s not that we expect anything to happen to us, I just found out about a certain state law that I hadn’t known about.

    It turns out, in the state of Kentucky, where we live, property doesn’t automatically transfer to one’s spouse on death. If I died today, with no will and no children, my husband would get half ownership of our house. My parents would own the other half. Similarly, if I have a bank account in my name only, he would be entitled to the first $15,000 – and after that, the rest would be subject to the same 50% split. (Actually I’m not clear if that is per bank account or if they take all cash holdings as one pot to split…but you get the idea.) I was floored. I had no idea our state laws were set up like that.

    At any rate, I recommend checking into what your state laws might say about the distribution of your property.

  8. Mary Lou says:

    As a register in probate for a county court this is some information that I suggest to the public in general. This is not legal advice, just some observations.
    If you do not want a court appointed guardian, take the time to do a power of attorney for healthcare and estate – even if you do not have anything. As you will need someone to take care of what you do have and what you might need. Most states have forms available on their web sites. If you do not document your wishes the state will make the decisions for you, not your loved one.
    Utilize payable upon death designations on every pension/insurance policy/financial account. In some states you can even do a payable on death designation for your home and other titled assets. These assets will then transfer outside of probate. Take the time to find out.
    Having a will does not avoid probate, but allows for the orderly transfer of assets to the named beneficiaries, names guardians for your minor children and allows for the decedents specific wishes to be known.
    Give your local register a call, they would be happy to tell what is available in your state.

  9. Kelly says:

    I can see the points of a will and life insurance but as far as a living will goes..what’s the point? As a nurse who works in critical care, I have seen PLENTY of family members override a living will!

    One family–a pair of daughters overrode their mother’s wishes to be a Do Not Resuscitate when she was admitted to the hospital with pneumonia. Ended up being put on mechanical ventilation, couldn’t get weaned off, ended up with a tracheostomy(a hole in the throat used for breathing) and then finally the daughters decided to honor their mother’s wishes and they let her go.

    That was one case. I’ve seen plenty of others too. One patient’s family “took their time” to find the patients living will, which stated that the pt did NOT want heroic measures to save the life. The pt’s spouse and children KNEW there was a living will but failed to produce it to the hospital and wanted everything done even if it went against what the patient wanted and was laid out in the living will. One day the person stopped breathing so was placed on a ventilator..never got off and was sent to a nursing home to live out the remaining days on a ventilator. In each case the family was allowed to override the living will. I’ve also seen cases where we’ve HAD a copy of the pt’s living will and the doctors IGNORED IT per the family’s wishes!

    So again if it’s legal(at least in the state where I work) for the family to override the living will, then what is the point in having one??

  10. Cheryl says:

    When naming a guardian for minor children, our lawyer advised us that the guardian does not need to be a person who will personally raise the children. It could also be a person who will decide who is best to raise the children. DH and I are raising our grandchild. He has no aunts or uncles or cousins that are in a position to raise him at this point, so we named a close friend who knows our wishes to be his guardian.

  11. BD says:

    Some of us don’t have any ‘loved ones’ of our own so numbers 1-3 are a moot point. ;)

  12. Leah, J.D. says:

    I’m not just saying this because I have a law degree, but please go consult a lawyer for items 1 – 3. It is amazing what you can screw up if you try to do it yourself.

  13. Leaving a will behind for your loved ones in case of your untimely death is the right thing to do.

    It can prevent major hassles from unfolding.

  14. Jules says:

    And we wonder why health care expenses are so astronomical…

  15. deRuiter says:

    Kai, You do need a will. What if you are killed in a fiery car crash (you’re killed on impact so you don’t suffer in this scenario!) and the person at fault is filthy rich with a fortune in car insurance? By leaving a will saying who is executor and who gets what percentage of your estate, what your wishes are for funeral arrangements, you stop the state from picking an executor (an executor gets a fee for services, thereby cheating a freind or family member out of honoring your memory by fulfilling your wishes and the comission) and you insure your heirs each get the percentage of the estate you wish and that the greedy hands of government don’t raid the estate while distributing crumbs to your family.

  16. lurker carl says:

    Many people would be better off creating and funding trusts. But that is more than a weekend project.

  17. deb says:

    Having a lawyer draw up wills, trusts, power of attorney contracts can be expensive. What if you really need to do this but don’t have the money for it? Is something like Quicken Willmaker ok to use? Better than nothing?

  18. Karen says:

    I just went through 7 months of helping a divorced friend, through a serious illness, who then died. I agree with the person who said get the medical and legal power of attorney paperwork done while healthy.

    Everyone assumes they will die quickly. But, a long illness can require help. I had medical power of attorney (done at the hospital bedside as she was dying) which allowed me to work with the doctor on her care. Since she did not have a will, and we did not have time to do the legal power of attorney (she was very sick, very quickly), I could not help with other major issues that came up.

    Although she had few possesions, she took the time to write out her requests on a piece of paper. She called it her “will”. She wanted her friends to recieve certain items, and her grandson to recieve some funds. Those wishes were not followed at her death. I had no legal recourse to stop the family from doing what they wanted with her jewelry, her money, and her cat.

    The living will was also not viewed as important by hospital
    staff, because as another person said, it can be easily
    overridden.

    If one is single, and not close to ones family, it is very important to decide on a friend who you would want to help, if you are unable to make decisons for yourself.

  19. john says:

    Depending on the size and complexity of your estate, yes a simple will kit like Willmaker or Suze Orman’s kit are fine.

    I am currently dealing with this issue with a relative and something to note is that beneficiaries listed on an account take precedence over a will so be sure those beneficiaries are in order. If you don’t own any titled items (i.e., real estate) you really wouldn’t even need a will if all your accounts have beneficiaries listed. Then, any individual items (i.e., jewelry) you want to bequeath can simply be written on a piece of paper, signed and witnessed and left with someone you trust.

    And do not forget a Durable Power of Attorney and Medical Proxy!

  20. J says:

    My husband died suddenly at a young age. No will, no life insurance. I’ve lost our home. I’ll be selling most of our possessions to cover the rent while I go back to school to learn something marketable (I was a stay-at-home mom).

    It sucks. Don’t be me.

  21. valleycat1 says:

    Suze Orman has a packet you can download & complete for all these forms, for a reasonable fee. Then it’s a matter of getting signatures notarized. You need to check to see whether your state requires an attorney be involved in setting these up – & most attorneys will give you an initial consult appointment free or at a reduced rate. Having a will, regardless of your situation, speeds up the process of settling your estate; if you don’t have family or friends you want as beneficiaries, you can still designate where the remainder of your estate goes.

    Lurker carl – when I set up a will years ago when my dd was a minor, setting up a revocable family trust for her benefit (in Texas, anyway) was simply a matter of naming it in the will – the ‘funding’ would have been the estate when I passed away.

    When someone holds a power of attorney for health care, the family or hospital should not be able to override, and you need to tell the person you’ve named them (& give them a notarized copy) so there isn’t any foot dragging on notifying you. This is separate from a living will (which would be enforceable by the person holding power of attorney).

  22. Jeff says:

    I’m just posting this here because I feel it has some good information in the area of personal finance but I personally enjoyed Shari-Mattingly Bevan’s financial tips as well.

    http://shari-mattingly-bevan.com/blog/?cat=3

  23. Liz says:

    I told my parents to sort these kind of things out before they pass away, and they said they’ve alreday done most of it. I know my brother and sister and me, we’re not likely to fight for material stuff, but as we do have two older half-brothers very different from us, we think my father’s stuff need to be sorted out before. In any case, I don’t really want my parents to leave anything but good memories, they already gave me my education and lots of love. And that’s what we plan to give our daughter, hopefully.
    Any way, what I want to do is the living will, and I proposed them to do, but laws in the countries we live don’t have that context cover. So if we do one with a notary (here is where you do wills of any kind) it will have no value as is not covered in actual laws. That’s something politicians here say that they have the right to decide for me.

  24. SLCCOM says:

    One major concern I have is the “horror” of living with a ventilator or other disabilities. Folks, if you are severely disabled, you can still have a good life!

    Someone who is elderly and ill may want a DNR, no ventilator and all that, but what if you are involved in a trauma that is heal able? The medical professionals may know that you can be treated and have a good life. Some living wills say if you are in a coma for three days, pull the plug.

    Don’t be too hasty to check out!

  25. Jim says:

    What are your suggestions on how to grow the battered emergency fund over the weekend?

  26. Stephan says:

    awsome tips, i am still young, but i am working on on the emergency fund and will be getting aroudn to teh others as funds become available.

    Preferred Financial Services

  27. Gena says:

    We’re still young [both under 30] but we’ve got 3/4 of this covered! We made wills and living wills right after we got married 2 years ago, and we auto-save about 33% of our paychecks.

  28. schismarch says:

    Are there particular insurance entities or portals folks could recommend to compare prices on life and disability insurance products? I have State Farm car insurance, and I’m happy enough with them, but I’d be interested to know what other options you might suggest.

  29. Steffie says:

    Please do yourself a favor and pick out the photo YOU want to accompany your death notice in the newspaper. And keep it updated. If I knew you as the kindly old lady in the neighborhood I won’t recognize your high school graduation photo. And don’t trust that your family will be able to choose the most flattering photo when they are grieving etc. Yes, it is creepy to think about your own death but do you want to make your family think about little details instead of remembering the good times they had with you ?

  30. DDFD says:

    Solid advice– too bad so many people think bad things won’t happen to them . . .

    I don’t know about you, but I don’t want to be keep alive as a vegetable after a few doctors agree there is no hope for a meaningful recovery . . .

  31. chacha1 says:

    Quicken Willmaker will accomplish a lot, and many states have forms you can download for power of attorney, healthcare directives, and living wills. And of course, if you get them from the state you’ll be sure they cover your state’s specific laws.

    For those who have no dependents or “loved ones,” you need to think not about your death but about what is very much more likely, statistically – disability. If you are 25 and in a horrible car crash, you are much more likely to be seriously disabled than killed. You need to get your stuff together.

    Accidental death and dismembership insurance is available from many banks as a perk of holding an account, for rates as low at $10 for a half-million in coverage. Disability insurance is part of some states’ payroll taxes – if it’s not in yours, look into buying some.

    You may not care about the government dealing with your “estate” if you have no assets, but I assure you, you will care if Social Security (US version) is all you have to live on if disabled.

  32. Honey says:

    My boyfriend (and most of his friends) are attorneys and they all agree that any reputable attorney will recommend AGAINST a will. In the vast, vast majority of cases, a trust is the better deal. In fact, they say that if an attorney recommends a will (or agrees with you instantly when you say that’s what you want), you should find another attorney – pronto.

    LegalZoom is probably the best and most cost-effective way to get these things taken care of (with the exception of a trust, which I think may be too complicated for that site).

  33. K.C. says:

    We had our trust drawn up for “free” as part of our Pre-Paid Legal insurance policy benefit. They will update it for “free”, as well.

    We have pre-paid our burial niches and also the costs for cremation. My wife’s parents had done this and it eliminated a lot of the decision-making, pressures and guilt upon their deaths. Pre-payment made sense for us because we are settled and plan on staying together until death due us part. I wouldn’t recommend it for a young couple.

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