Providing For Family After Death

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OCEAN CITY — Have you considered what steps you can take to provide for your spouse when you’re gone? Your spouse and other family members may be facing two struggles when you die—coping with their grief and trying to sort out financial and other legal papers. Planning now can help your loved ones avoid much of that second struggle.

Even though women outlive men by five years on average, both men and women need to follow through with planning for the end of their lives. You and your spouse should complete this process together and keep your important legal documents up to date. In the first of a two-part series, here are some ideas and information to help get you started.

A living will allows you to give instructions for your health care if you are incapacitated. It tells your doctors and other health care providers your wishes about medical procedures. Consider a living will, regardless of your current state of health — while you’re still able to make your wishes clear to all.

Health care power of attorney allows you to appoint someone to speak for you with doctors, hospitals and nursing homes if you are incapacitated. The person you name can make decisions about your health care, approve treatment and carry out the wishes you stated in your living will. Complete a health care power of attorney at the same time you complete a living will.

Keep everything up to date because health care providers can reject your living will or power of attorney if it is outdated or incomplete—for example, if it no longer reflects the current law. Review your living will and power of attorney with your legal advisor on a regular basis.

Life insurance offers a way to provide money to your spouse and other survivors soon after your death. Life insurance payments are not subject to estate tax. The money could be used for your funeral and final medical expenses, or could be used to support your beneficiary. Discuss how much life insurance you need with your financial advisor.

Financial power of attorney is similar to a health care power of attorney. The person you name in this document can handle your financial affairs if you are incapacitated. Choose someone you trust to protect your interests and make good financial decisions. As with a health care power of attorney, you and your spouse both need one, and it could be rejected by financial institutions if it is incomplete or outdated. Review your financial power of attorney with your legal advisor on a regular basis.

Wills are important for several reasons. Your will names an executor to manage your estate after you’re gone, and it states your wishes when you are no longer able to speak for yourself. Even if you believe your family knows your wishes, they may be overwhelmed with emotion.

Before you write your will, ask the person(s) you choose if they agree to be the guardian. You may also want a prized possession to go to a particular child, relative or friend. Put your wishes in writing.

Trusts are established during your lifetime and offer an option in addition to wills if your estate planning is complex (certain issues, like who would raise your children, can be addressed only in a will). A trustee is named to manage the trust, and assets held in the trust do not go through probate (probate is an expensive court process for executing wills). Also, assets held in a trust may not be subject to estate tax.

(A Merrill Lynch Wealth Management Advisor. She can be reached at 410-213-8520.)

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