I'm 43 years old (I know I don't look it). This evening, I spent half an hour writing out instructions to my loved ones for what to do in the event of my untimely passing. Now, you may be asking, what the heck does this have to do with real estate, financing, or blogging?
Well, my 83 year-old Uncle Marvin (may he rest in peace) died last week. Despite the fact that he was 83, and about as together in his personal and financial affairs as a man could possibly hope to be, he died rather abruptly. He suffered a fall, and was gone within a week, though he was in relatively good health merely seven days earlier. Had he not taken the time to write a letter and disseminate it to his family in advance, they would not have the legacy information that was so important to make it easier on his loved ones in a time of suffering.
The reality is that most of us just don't like to face death, and while I realize this column is hardly the place for existential musings, I have to point out the real failure of our society to encourage us to prepare properly for death, which, in combination with our own fears, prevent us from doing a lot of the things we should take care of. For example, if you have kids, you should have a life insurance policy; in fact, the younger you are, the more important it may be. If you're the one in the family who does the finances, make sure you leave instructions like where the checkbooks are, where the bank accounts are, what the account numbers are.
Be aware that your family may not be able to access the bank accounts, even your spouse or grown kids, especially if you have an LLC or other business entity, and they are not on those corporate records. Do you pay yourself monthly from your business, and keep only a few thousand dollars in checking each month? What will your husband do if you get hit by a bus on the 28th, and the money's all tied up in the business account because you always transfer it into your family account on the 1st? Speak with your business bank manager and see what they suggest in case of your death, or even incapacitation. Can you leave a letter in your file that they can access the account under those circumstances? Can you add them to the business as officers and circumvent the whole issue now?
And we haven't even gotten into probate – if you have any assets at all, such as your personal residence and the houses or multi-family units or commercial properties, consider a living trust that will avoid probate, which can take a year or longer and eat up to 50% of the value of your estate. I'm not a lawyer, nor do I play on one TV, but this is the kind of thing that if you avoid now, your family will regret later, when they can least afford it or want to deal with it.
Last, make sure you leave some sort of instructions for your family for your personal belongings – items that may or may not be included in your will. If it's got value, get it in your will. If it's just your insect collection, or your doilies or your paperback books, perhaps it doesn't need to go into your will, but let the family know what you want to do with it so they don't have to think about it after you're gone. If you're buying and turning over tons of properties every year, but you're doing it on your own, leave some general instructions for what to do with the properties in process, and someone designated with your limited power of attorney who can close that escrow worth $50K cash at closing so your wife has some extra money coming in to her and so the deal doesn't go South.
You get the idea. Take a few minutes, think about it, write it down, and make sure you finish with “I love you.” You really can never say that enough, and one day, it will be the last time.