The following is a guest post from Adam, a good friend of the blog. About 2 years ago, Adam had a terrible experience in his life and lost some of his closest loved ones. I asked him if he’d be willing to share his story and some of the things that he learned from it, in an effort to give some advice to us to help us prepare for the worst.
Let me start of by saying that I’m in no way a certified accountant, financial planner, lawyer, or anything like that. Please, before you do anything with the information in this article, seek out professional advice as you consider the following article. I’m just someone who has experienced something that is utterly life-changing, and through that have learned things that I would never have learned otherwise. And I simply want to pass along some of those things I’ve learned during this season in the hopes that you, as the reader, might be able to glean some information that could better prepare you for the storms of life.
Also, this is just my experience. I’m sure that there are people who have experienced something similar, and would give you completely different advice. That’s why I would suggest seeking out professional counsel in all these areas. My advice for when you decide to seek out professional assistance is to ask trusted people (mentors, coaches, bosses, responsible friends, etc.) for suggestions, then do your own vetting of the names they give you. I’d recommend being very cautious in who you allow to speak into these matters, as these issues could end up being extremely detrimental if they either a.) aren’t done correctly or b.) done by someone who has nefarious intentions.
In March of 2016, the worst thing I could ever imagine happening happened. My wife and mother were killed and my sister was seriously injured by the insanely foolish and negligent actions of one individual. Up until that moment, I had barely thought about what would happen if my wife died. Life is busy and it was something that we always assumed we’d have more time to consider, so it was always pushed to the back burner. But this season has taught me many things that I believe would be beneficial for someone to take into account before facing the loss of a loved one yourself. My hope is this article will give you things to consider and think about no matter what season you find yourself in.
As you continue reading this article. I would suggest you do so through a filter that is built upon one assumptions and one question. The assumptions is, ‘people tend to not act in a “normal” state of mind when in the midst of deep grief’. I can tell you that as soon as the corner tells you that your wife is dead, any and all sense of “normal” evaporates from your life. Sure, you might be able to function in a heightened state early on, but grief is waiting and will catch up with you or your loved ones quickly and they will likely not be able to function “normally” for some time. The question I would ask you to build your filter upon is ‘should something terrible happen to me, what can I do to make life easiest for those that survive my death?’. Grief is terrible. That’s the truth. It grinds at you, 24 hours a day, 7 days a week. Wearing you down physically, emotionally, and spiritually. It makes even simple decisions exhausting. Life is totally different than you could ever imagine when you’re grieving. A decision that might usually only take you a few hours/days to make, could end up taking weeks or months. Just please do not assume that the way you or your wife, or your family might function today is the same way you’ll function when grieving. It hasn’t been my experience, nor has it been the experience of people I know who have grieved deeply.
Auditing & Documenting
Before you can plan for the future, you have to know where you are now. You need to figure out your assets (and liabilities) and document those. This includes “hard” assets like cash, stocks, bonds, etc., as well as “squishier” things like life insurance policies, accidental death and dismemberment (AD&D) polices, long-term disability policies, etc. The latter could include items you’ve purchased privately, as well as benefits your company might be providing you. For example, my wife’s company carried an AD&D policy on their employees that I had no idea about until I received a letter in the mail from the insurance company.
Now to talk about how you go about doing this. Again, knowing what I know now has drastically changed how I will do this in the future. In our marriage, I handled all the money. It was a great system. My wife was smart enough to be the financial person (she had done it for herself for a long time), but it’s something I love. So it was a responsibility in our marriage that I took on. And it was largely something that I did without letting my wife in on all the details. She had a general idea of what was going on and where the money was, but not a detailed understanding. I’m not saying you must account for every dollar everywhere, but I think sitting down and making a list or spreadsheet showing which accounts things like salaries are paid into, and which accounts common payments like mortgage, credit card, etc. come from is a wise decision. Looking back and thinking what things would have been like for my wife had the roles been reversed and I died, it scares me. She would have been forced to try to grieve while at the same time taking on the daunting task of figuring out our finances.
On a similar note, I would also highly recommend creating a spreadsheet with usernames and passwords. This will require some maintenance keeping it up to date, but I think it’s important. I remember trying to file our taxes just a few weeks after my wife’s death, and since it was the first time we were filing jointly, I had to include her previous year’s tax return number. I knew which tax software she used, but I could not guess her password and thus could not get the last number I needed. Thankfully, the customer support people I was talking to finally were able to give me this number after many tears and escalations to their supervisors. While I got what I wanted, it wasn’t easy and added stress upon grief. This small story would have been much easier if I would have known her password and just been able to log in and get what I needed.
A quick and (usually) easy thing to do is to name beneficiary on all of your accounts. This is the person who will receive payout incase of your death. On things like life insurance policies, you usually have to name the beneficiary at the time you sign up, but on things like bank accounts, retirement accounts and brokerage accounts you don’t have to name someone at the time of opening. Spend some time and go back through all of your accounts and make sure the correct person is listed as your beneficiary. If you fail to do this and something happens, then you open the survivor(s) up to, at the best, being forced to jump through bureaucratic and legal loop holes, and at worst face daunting legal fights if there are multiple people who believe they should receive the payouts of your accounts upon your death.
We didn’t have a will. And to be honest, it hasn’t been that big of a deal. We didn’t have a lot of assets or things and thankfully her family has been respectful enough to not demand rights to any of her possessions. I would put together a will if I have children in the future. I would hate the thought of them losing both of their parents, then being forced to undergo the additional anxiety of a custody battle between grandparents and aunts and uncles. And I get the excuse you might use, something like “well everyone knows who’s getting the kids” or “there’s no way our families would fight over the kids.” And maybe you’re right. But just remember, when grieving heavy losses (like a child, spouse, or sibling), people can sometimes not function in ways you wouldn’t expect.
There are software and websites out there that can help you write a will, and I have no experience and don’t know anyone who has used that method to create this type of document. And maybe because of that, I would suggest using an estate lawyer put this document together. They can write it in a way that it is valid for all current and future heirs. That way you don’t have to worry about constantly updating your will every time you have a child.
When you create a will, you usually name someone to oversee the will in case you die. For instance, I was the executor or my parents will and I’m now the executor of my dad’s will. While this might be a bit awkward, I would highly recommend you having whoever is the overseer of your will read the will and ask any questions as often as you write a new will. I’ve done that with my dad’s will, and being pre-versed on what his wishes are brings a certain sense of comfort.
I would say that insurance is the most complicated topic that will be discussed in this article. There are just so many options, I wouldn’t be able to cover everything in an article that is twice as long as this one. Not only are the different categories of insurance (life, long-term care, disability, accidental death and dismemberment (AD&D), but some of the categories have sub-categories. For instance, life insurance can be whole-life, term-life, variable, etc. Each of these have their pros and cons, and before you decide on which one is right for you and your family, I would suggest you seek out a trusted and qualified individual to help you understand the ins and outs. Another thing I would recommend is using an insurance broker. This is someone who isn’t tied to a specific company, but rather is more independent and can search for the policies you’re interested in over multiple companies to get the policy that is best for you.
Aside from the AD&D policy that my wife had through work, we had no life insurance policies. I can tell you that we discussed, but life insurance was pretty far down our list of urgent matters. What healthy 27 and 29-year old recently married couple sees life insurance as an urgent matter? With the life expectancy in the US being almost 80 years of age, being under 30 makes this topic feel like something that can wait until tomorrow. But my view of the importance of some kind life insurance has changed drastically in the past year. Below is a small story to help explain why.
I bought my house before I even started dating my wife. I had been working and was tired of paying rent, so I decided to go ahead and buy in the summer of 2013. My best friend moved in and paid rent, which helped me early on not become hamstrung by the mortgage payments. As I progressed at my job and moved up in the organization and got the associated raises I was at a point where I could have paid for my mortgage comfortably without a roommate. Then I got married and went from a 1 income to a 2-income family. This put us at a place where we could really start paying down the house fast, putting extra money towards that (and other debt) aggressively. Then the events of March 2016 happened. I was back to being a 1 income person. Thankfully, I was at a place career and salary-wise where I could continue paying for the mortgage on the house. I shudder to think what would have happened if I would have been killed that day. My wife would be back to 1 income instantly. With no life insurance policy to protect her, she would have been forced to grieve, while also trying to figure out our finances, and also trying to pay the mortgage on the house. And with what her salary was, she would have been stretched every month to make the mortgage payment and cover all the other expenses. In many ways, it frightens me and I feel shame thinking about my wife being put in that position to not only have to suffer through the emotional, physical, and spiritual stress of grief, but also have to survive the financial stress that she would have found herself in immediately.
Something else to consider when debating whether life insurance might be “worth it”. According to the National Funeral Directors Association, the median cost of a funeral and burial in 2017 was $8,755. As they note in the article, this doesn’t take into account cemetery fees or monument/marker costs, which could easily add another $5,000 to the final price. Again, ask yourself “what position would your loved ones be in if they had to spend $15,000 in burials costs after your death?”.
It’s also hard to predict what your work life will look life after a loss. My company reacted in an incredible way since my loss. I remember getting a call from almost every level of leadership (my boss, his boss, HR, even up to my CEO) letting me know that they were there for me. I specifically remember hearing multiple times that they wanted me to be healthy, and were more concern with my grieving and healing than the work I would be able to do. I was never pressured to come back before I was ready, and once I was back, they were gracious and understanding with my diminished workload. I would say that it took about 11 months before I felt like I was close to being back to performing at my full capacity once again. I wish I could say this is the only way I’ve heard of companies honoring their employees who have lost someone, but that would be a lie. I’ve heard so many stories of people being let go because it took them too long to get back up to full capacity at their job. Think about having that stress added on top of grief and financial struggles. Now think about that happening to your spouse or children or other loved ones if you were to pass away. Having a sufficient life-insurance policy to act as a “parachute” to allow your loved ones to grieve without even thinking about the need for a regular income.
I hope this article has given you some things for you to think and talk about with your loved ones. These conversations are never easy, and rarely are the comfortable. But they are important, and I hope you see the importance of having these conversations before you think you need to.