As an estate planning attorney and licensed insurance agent, I often meet with people to help them make plans for after they are gone. However, I also often meet with folks who are left behind without a plan and serious financial difficulties.
Recently, I met with another widow who had been left with lots of bills, no last will and testament or trust, no life insurance and little in the way of options. I see this far too often, and it breaks my heart.
I understand the reasons that people put off estate and financial planning. It’s expensive to do it properly, and generally, we all feel like we aren’t going to die soon. Likewise, I hear financial advisors tell people to avoid life insurance and just put the premiums into an investment account rather than waste their money. I understand what they are suggesting, but too often, the consequences of going uninsured suggest strongly that avoiding life insurance was a poor choice.
What is the plan? First, estate planning: Do we really understand what will happen “legally” when we pass on? It is far better to know and have a plan in place so that your family is not left with high legal bills or a vicious family fight after you are gone. If you act now, you can minimize or eliminate probate costs altogether. You can have a solid transition to the next generation for your family business or farm. You can avoid uncertainty which can lead to a legal battle that will drain your estate and leave little for your heirs except a legacy of contention. Believe me; I see it too often.
Second, life insurance: Do we want to take the risk of leaving a grieving loved one with bills and no recourse? A life insurance policy for hundreds of thousands of dollars only costs a comparably tiny percentage each month. I know that investment professionals want you to invest that premium rather than throw it away, but now you can get a policy that pays back your entire premium payment if the policy goes unused. You are losing the interest you might have earned on that money…but your family will be far better off if something unexpected happens. Picture this image in your mind… you have passed away in a tragic car accident. Your beloved spouse is looking at a briefcase. If you’ve been paying for a life insurance policy, she’s looking at stacks of hundred-dollar bills. If you’ve been avoiding life insurance, she’s looking at a mortgage past due notice, auto loan, credit cards, college tuition and a substantial loss in income.
Can you imagine why a recently widowed person is breaking down in my office? On the other hand, I have had the privilege of delivering a substantial life insurance check to a surviving spouse. I could literally see the weight come off her shoulders as she hugged me and cried tears of relief.
Consider carefully how you might alleviate the financial burdens of your heirs with estate or succession planning and life insurance.
Curry Andrews is a estate planning attorney serving Idaho residents and will travel to any Idaho location. He can be contacted at 208-226-5138 or www.familyestates.net