Preparing for Disaster Series (Part 2 of 10): Death

Back in my social service days, death was another disaster my clients had to deal with. Since most of my clients were youngish people, usually with small children, their spouse dying was a HUGE crisis. I mean, when you are young, there are a lot of things to worry about--your finances, getting and keeping a job, taking care of your kids--however someone dying young usually isn't even on the person's radar. But it does happen and the scramble afterwards to take care of funeral arrangements, pay bills, and help people through the grieving process really made me aware of the fact that you can die at any time so this is another area where it pays to be prepared ahead of time. Here's ten things to prepare for right now in case the worst happens:

1. If anyone depends on your income (spouse, kids) be sure to get life insurance (term life insurance is best). I have seen a 55 year old woman who never worked a day in her life have to pick up menial jobs to make ends meet because her husband let his life insurance lapse and then he died, leaving his wife too young to collect social security which basically left her penniless. Fortunately, for young people, life insurance is very inexpensive.


2. Have a Will, Living Will, durable power of attorney, and medical power of attorney. These documents (properly written and notarized of course) make the death and dying process much less complicated. Unless any of these documents could be contested, many states will let you draw up your own documents as long as they are officially notarized. For a bit more protection, you can draw up your own documents to save money then pay an attorney to give them a quick read through to ensure everything is correct.


3. Have an emergency fund! Right after someone dies, there are all kinds of expenses that need to be taken care of, unfortunately it usually takes life insurance a while to pay out so the money in an emergency fund (kept in an account where both spouses can access it) can really help a person through the first few weeks after a death whether to pay bills or pay for funeral arrangements.


4. Discuss your final wishes with your SO. It's kind of an odd conversation to have, especially when you are still strong and healthy, but many people can end up in the poor house when a loved one dies because they guilt themselves into spending way more than necessary on a fancy funeral and burial plot when, if the loved one would have been asked, wouldn't have cared what kind of casket/burial plot location/flowers/etc they got. FWIW, I would rather the hubby keep his money and enjoy it rather than spending it on me when I am dead and can't enjoy it. I told him that if I am practically dead to pull the plug (I'm a fan of compressed morbidity), have me cremated (it's way cheaper than a burial), and to skip the funeral service and have a party to remember me at home (again, as long as he has friends to support him when he is grieving, I'm happy with that...besides, funerals make me sad).


5. Get out of debt ASAP. One of the main reasons I became so focused on getting out of debt was because a lady came to my office one day four months after her husband had died. She had literally never handled the finances and didn't know what to do with the four month's worth of mail she brought me in a giant bag. After sifting through the mail I asked her if she knew they were nearly $100,000 in debt not counting the mortgage. Of course, she didn't know. Her husband always juggled the bills (looking at his mess of bills the stress from juggling these debts probably speeded up his demise!) and she thought everything was fine. Everything wasn't fine and in the midst of her grief she ended up having to file bankruptcy too. That situation really hit me hard and I realized that there was NO WAY I was going to leave my husband with that kind of mess (or vice versa, end up with myself in that kind of mess if he were to die first) which pretty much made me super focused on paying off all of our debt.


6. Know what death benefits you are entitled to. In my case, my husband is a veteran so there are a number of death benefits he is entitled to from the VA. If you have minor children, they are also entitled to death benefits if a parent dies. Searching out all of the benefits you are entitled to can save you a lot of money so it pays to find out what you are entitled to.


7. Have all of your important documents in a single place where both spouses can access them. After someone dies, there is a mountain of paperwork to do. To streamline this process it helps to have all of the family's important documents together in one place (I keep these in a safe as well as keep scanned copies of each document in my computer). Among the documents you need: birth certificates, Wills, powers of attorney, medical power of attorney, adoption records, insurance policies, financial records, list of creditors, marriage records, divorce records, military records, etc.


8. Give stuff to people when you are still living, enjoy people too while you still can. Suffice it to say that seemingly normal people can act like rabid hyenas after the person who held the family together dies. From experience I have learned that it is best to give stuff to people when you are still alive (this ensures things go to who you want them to go to and you get to see them enjoying the things you give them) and I have also learned that it is way more important to spend time with people NOW while you can enjoy them instead of showing up at the funeral wishing you had called/visited your loved one more often.


9. Prepare an "if I die" letter. This is probably the last thing people want to think about, especially if you are young and healthy, but I have seen way more than my share of people die in the prime of life so I know that putting such a thing off until later can often be too late. This letter should include things you want to say to your loved ones, advice about what they should do after your passing (ie: how to arrange home matters and business matters), user names and passwords to all of your online accounts (some people even write a final blog post to be published after their death), plus anything else they need to know.


10. Don't forget anything. Before and after death, there can literally be a hundred things that you need to do. In addition to this checklist, here is a bunch of other good lists of things to remember to do both before and after a loved one dies.