One of the realities of life is that at some point, we all will cease to exist. It’s inevitable. The responsible thing to do is to face up to it and make the best decisions possible for our families while we can. There are three very simple, yet important, steps you can take now to make things a bit easier for everyone involved.
#1 Choose your final resting place
One of the most costly decisions you’ll have to make is whether you’d like to be buried or cremated. According to the 2010 National Funeral Directors of America General Price List Survey the average cost of a funeral is $6,560 while according to CremationResearch.org the average cost for cremation is $1,110. The no-cost alternative is to donate your body to science.
You’ll have to consider the costs involved as well as your beliefs. There is some discussion about whether it’s better to pre-pay for your services or hold the cash in an account or trust until the money is needed. It’s not uncommon for the companies or items that have been pre-paid to no longer be around by the time they are needed. Regardless what you choose, it’s important that you start thinking about it now so you and your family can prepare.
#2 Think about avoiding taxes
Contrary to popular belief, a will may not protect an estate against taxes due after death. It’s important that you make every effort to pass your home, accounts at financial institutions, cars, funds in investment accounts, jewelry, and any other assets to your heirs with the least amount of taxes allowable.
Estates of less than $5 million will owe no estate taxes and those with more than $5 million in assets will be taxed at 35%. That sounds great until you decide that since there are three children of the deceased the house will be sold and capital gains taxes will have to be assessed and paid. The government doesn’t miss any tricks. Make sure you speak with an attorney that can help you pass along your assets to the people you want them to go to with the least amount of taxes owed. It’s even more important if you think you have a small estate. You definitely don’t want your estate to go to the government instead of your heirs.
#3 Make your wishes known
I’m sure we’ve all heard it said before that funerals either bring families together or tear them apart. Making your wishes known to everyone verbally and in writing before you pass will help everyone accept your wishes.
You built your estate up over time and you know what you want to happen to it after you pass. Whether you’re going to donate it to your alma mater, pass it to your heirs, or have it buried with you it’s completely your decision. Don’t let anyone else pressure you into making decisions that you don’t believe in. It’s your job to help everyone understand and get on board with your vision.
What other things need to be considered? Share them in the comments.
Shay Olivarria is the most dynamic financial education speaker working today. She has written three books on personal finance, contributes to multiple online media platforms, and is a foster care alumni. She's been quoted on Bankrate.com, FoxBusiness.com, and The Credit Union Times, among others. Visit www.BiggerThanYourBlock.com to find out more about her work.
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