In the unfortunate event of your partner or spouse passing away, it’s crucial to have your estate planning documents ready.
Creating an estate plan is essential. I learned this through a tough experience. If you haven't set one up, a checklist is a great starting point. Let's explore what you need to include.
At the end of 2012, my partner unexpectedly passed away. He was 40, I was 37, and our children were just 3 and 6. His sudden death due to a rare heart condition was a shocking blow, compounded by the complexities of managing his estate, something I thought we had years to prepare for.
Our situation was further complicated by the fact that, after a decade together and two kids, we were registered domestic partners but not legally married. My partner had no will, life insurance, or guidance on managing his affairs.
Navigating his bills, tax filings, and accessing his bank account was not just emotionally draining but also quite costly and intricate. In the end, I had to be appointed as the voluntary administrator of his estate and, separately, the financial guardian of our children to transfer his bank account to them, which can only be accessed when they turn 18.
A year and a half later, I lost my mom. Thankfully, my parents had their affairs in order, and my dad wrapped up her estate much quicker than I did with my partner's, even though my mom had significantly more assets.
Had we set up some basic paperwork, everything would have been much simpler. While some items are particularly critical for unmarried couples, most are important for anyone. Here are five essential items I wish we had included in our estate planning checklist before my partner's passing.
1. Create Wills
This might seem obvious, but it’s incredibly important. Contrary to popular belief, the state won’t automatically take your property if you pass without a will. However, dying “intestate” can create a tangled mess, requiring someone to navigate the tricky process of becoming a voluntary administrator.
When drafting your will, think about where your assets should go. For parents, it's vital to name a guardian and a trustee, along with an executor.
The guardian is responsible for making decisions for any minor children if both parents die. This person may not necessarily be the child’s caregiver, but they should be trustworthy. The trustee manages any money or trusts, and it’s best if these roles are held by different individuals. The executor should be someone you trust to uphold your wishes.
Even though they won't be included in the will, consider writing letters to the guardians that can be read only upon your death. These letters should be updated as your children grow and their needs change. While not legally binding, they help convey your intentions.
Many believe that a lawyer is needed to create a will, but it’s often better to draft one yourself than to leave it undone. Websites like Do Your Own Will can assist with this.
2. Establish a Living Will and Health Care Proxy
The next crucial item on your estate planning checklist is to set up health care proxies. These documents (also known as durable medical powers of attorney) address medical decisions when you cannot voice your preferences. Living wills typically cover end-of-life choices, making both equally significant.
Being married doesn’t guarantee you’ll make the final health care decisions for your spouse, and vice versa. Consider the case of Terri Schiavo: her husband and parents ended up in court over her care after she fell into a persistent vegetative state. If you're not married, you typically have no authority over your partner’s medical decisions.
My partner's sudden passing highlighted this need. Though we were in the process of arranging this, the urgency of such actions can’t be overstated. Don’t wait for a specific event like a pregnancy or surgery to take this step. You wouldn’t want your parents or a partner’s family making significant medical choices for you, so put this in writing.
Prior to his passing, we were working on securing additional life insurance. I had a policy through work, but we didn’t finalize his coverage. The lesson? Always follow up.
3. Appoint a Digital Power of Attorney
As our lives become more digital, having a digital power of attorney (POA) is increasingly essential. Digital assets aren't owned in the same way as physical property. For example, photos shared online may not belong to you once posted. A digital POA in a legal document helps ensure your digital assets, accounts, and social media profiles pass to your beneficiaries. Luckily, my partner had shared access to his professional website and bank account with my uncle. However, many families might find it disastrous to be locked out of their digital lives, especially if they run an online business. Make sure to include this in your estate planning checklist.
4. Ensure Access
After my partner's death, I realized that our password privacy created significant issues. I desperately needed a family photo stored on his password-protected computer. Through extensive sleuthing, I managed to gain access, but I still couldn't reach his bills, our Netflix account, or his online profiles.
While sharing passwords can feel personal, it’s wise to agree on shared passwords for accounts like utilities or streaming services. At the very least, know where each other keeps essential documents like birth and marriage certificates. Additionally, you should be aware of any joint financial information, including bank accounts and credit cards, especially if you’re not handling the finances in your relationship.
The Key Takeaway About Estate Planning Checklists
Contemplating the possibility of an early death can be unsettling and uncomfortable, and planning for such an unlikely event often falls to the bottom of our priority lists. However, neglecting this reality can worsen your circumstances if the unexpected occurs. Taking a few simple steps can significantly ease the burden on your loved ones.
