we hadn’t planned to write this post this week (or anytime soon), but last week, claudia of two cup house posted on some things that her father’s sudden passing made her realize she needs to do. the same day, the adventure sports world got news that yet another prominent athlete died, leaving behind a wife and two young children. news like this tends to hit ski towns like ours especially hard, and it’s sadly not a rare occurrence. the subject of how our society glorifies extreme athletes, encouraging others to take greater and greater risks, is a subject for another day. but the confluence told us that we needed to share how we plan for the worst while hoping for the best.
of course we hope we live super long lives. i want to live to be 100, or at least 90, and while the mr. doesn’t share my lofty age aspirations, he wants to make it to at least 80. (i don’t know what he imagines i’ll do during those 20ish years without him… perhaps we can persuade him to stick around a couple more decades to keep me laughing.) that means that we need all the money we’re busily squirreling away to last a good long time, like 60+ years, and we’ll likely stay well under the four percent safe withdrawal rate to make sure that it does, in addition to having back-up plans in place.
but while we enthusiastically plan for a long future, we also make sure that we have everything in order should the unthinkable happen, and something tragic befall one or both of us. i had the experience of helping someone move out of a house packed to the gills with a lifetime’s worth of stuff, and it was one of the hardest things i’ve ever had to do. it’s something i don’t ever want someone to have to do for us, and that thought motivates us to keep clutter from piling up in our home. likewise, if we’re incapacitated by an accident, we don’t ever want anyone to have to make hard choices on our behalf, or question our wishes, and so we’ve tried to make things as easy as possible for whoever might be left behind.
at the ripe old age of 36, i believe i’m on my fourth or fifth will. (yes, i definitely got some weird looks in the college dorm when i asked some friends there to sign as witnesses on my first one. but i had to make sure my nine inch nails cds went to a good home!) the lesson to take from this is not that i’m a weirdo (although you wouldn’t be wrong about that), but that doing a will or any of the other documents included in our estate plan is not hard. it’s also not expensive, or it doesn’t have to be. there are great, legally enforceable tools available on sites like nolo.com, for very reasonable rates. we’re big fans of their willmaker plus software, which includes all of the docs we mention here. here’s what’s in our estate plan:
will — our will is pretty straightforward, since we have no children and don’t plan to. we live in a state with rights of survivorship, so the will isn’t really necessary if only one of us dies — the surviving spouse will just keep all assets. but if we both die, we designate the relatives and charities that our assets are to be divided among. we will likely decide in the future to establish a living trust, which would avoid probate court for surviving relatives and have some tax advantages, but it’s a bit more costly and we haven’t done it yet. at least the will is clear and simple, which minimizes any potential disputes (not that we think our families are the types to dispute a will, soap opera-style.). we review our will periodically and update it when we want to designate additional beneficiaries (like our niece and nephew, who weren’t born when we first did our will).
durable power of attorney for finances — if something should happen that renders us unable to make decisions for ourselves, we’ll want to be sure our finances are in the hands of someone we trust. a durable power of attorney for finances does that.
health care directives — our health care directives cover health care decisions if we’re not able to make them for ourselves, and include an advance directive and another power of attorney. we each have an advance health care directive, or living will, which specifies our preferences on difficult subjects like whether we want to be resuscitated or be placed on life support, or whether to donate organs, so that loved ones don’t get put in the position of having to decide at what would be an extremely stressful and emotional time. we also have durable health care powers of attorney, which designate who is authorized to make health care decisions on our behalf if we can’t make them for ourselves. the power of attorney docs have contingencies, so we each have the other listed as the primary designee, mostly to have ourselves doubly covered, in case the hospital doesn’t believe that we’re married because we have different last names. if something happens to us both, our contingent designees would then step in to make decisions on our behalf. note that health care directives don’t enforce themselves, so it’s critical to make sure that trusted loved ones have notarized copies, know to provide them to the hospital if something tragic happens, and know that they may need to push to have them enforced.
final wishes — the will, power of attorney docs and health care directives are all legal documents. they are written to comply with laws and legal standards, and they are not inclusive of everything we would want to happen should we die sooner than we intend to. to cover everything else, and to convey our thoughts to loved ones, we have prepared non-legally binding final wishes documents. these cover things like our funeral preferences (mostly that i want a marching jazz band and a second line), notes on assets loved ones would inherit, notes on pets, and some of the mushy stuff we want to be sure people know if we don’t get to decide what our last conversation with them is like.
life insurance — we each have two term policies: one through work, and one through usaa. our work-provided life insurance is what we think of as our income back-up, and would be sufficient to let either one of us retire right away if the other died, which is what we both want for the other. our usaa term policies go until we’re in our late 50s, at which point we’ll probably let them expire. until then, we keep them to cover health care expenses that would likely accompany any accident or extended illness that would lead us to die young. there is legitimate debate about whether or not financially independent people need life insurance, but we feel like term insurance is cheap enough to not be an issue. whole life or universal life, though, is another story, and we stay far, far away from those.
other insurance — we currently have employer-provided long-term disability insurance, but since that’s something that just replaces income, we almost certainly won’t buy that on our own once we quit. what we may very well buy, though, is long-term care insurance, which would cover a stay in a nursing home or rehabilitation center. we’ll update you on that one in a few years… ;-)
this is one of those subjects that’s hard to talk about, and not exactly uplifting to think about, but for people like us who are planners by nature — which we assume applies to 99 percent of fire bloggers — it only makes sense to put a little thought into your estate plan. for us, it’s not even about our “estate,” it’s about making sure that we aren’t ever a huge pain in the ass for people left behind. cleaning out a house full of stuff, or dealing with complicated finances with unclear direction, is not something we ever want our family or friends to have to do on our behalf. and there’s huge peace from knowing that you’ve got everything in order, and won’t leave a mess behind.
have you done any planning for the worst? anything we should add to our list? have you found a better solution than the nolo site or products to do estate documents inexpensively? please share!