No one likes to talk about end of life planning, because it seems like a topic with too much finality. But when you have kids, you don't want to leave their financial future up to chance if something unexpected happens.
Recently, a friend of mine died, and we saw a Go-Fund-Me pop up to cover the funeral expenses.
The sad fact is, that for many Americans, end-of-life planning isn't a priority in their lives.
According to Best Life Rates,
In 2020, 54% of Americans are insured, down from 57% in 2019, with 1 in 3 families remaining uninsured.
This is a staggering amount of people without life insurance, and many of them may be young families with children. If you take good care of your kids now (and I am betting that you do!) it is just as important to make sure that they are well cared for if something happens to you.
Children Need a Caregiver After a Loss
One of the first things to consider in terms of end-of-life planning is creating a will that outlines who will care for your children if something was to happen to you.
Once you make your will, be sure to have it notarized, and give a copy to the person who has agreed to be your child's caregiver in the event that you were to pass away.
During the past two years of the COVID-19 pandemic, many parents have suffered an untimely death and left their children orphaned.
According to the CDC,
From April 1, 2020 through June 30, 2021, data suggest that more than 140,000 children under age 18 in the United States lost a parent, custodial grandparent, or grandparent caregiver who provided the child’s home and basic needs, including love, security, and daily care. Overall, the study shows that approximately 1 out of 500 children in the United States has experienced COVID-19-associated orphanhood or death of a grandparent caregiver.
Many of these orphaned children are now in the foster care system. That means, in addition to the trauma of losing their parent or caregiver, these children have had to go and live with strangers.
Since there are many of us who don't always have other close family members who would be able to care for our children after an untimely death, it is important to reach out to our friends who know our children well to line up another caregiver. This is something that we have done in our own life.
If anything were to happen to my partner and I, we have a will stating that our daughter would go to live with her god-father. He is also a beneficiary to my life insurance if anything was to happen to my partner before me, or if we died at the same time.
Having a legal will is a good way to ensure that another non-family caregiver would be allowed to care for your child if something were to happen to you. If you die without a will, your child will either be placed with a family member, or put into foster care.
To make a will is simple, and you can find many free will templates online that just let you fill in the blanks and print out easily.
Here are a few sites with printable templates, for your convenience. There are many others as well. You may also consult with a lawyer if you have a complicated custody or financial situation.
If you are divorced, for example, it may be good to select a substitute caregiver from each side of the family.
Making sure that you have a will in place that says who your child will be cared for makes sure that their wellbeing will be taken into consideration. It is also good to let your child know who would be caring for them in the event of an emergency.
As I mentioned at the beginning of this article, it is important to have life insurance in place to pay for your final expenses. This is especially important when you have children.
If you have life insurance, you can get just a small amount to provide for your final burial expenses. Or, you can get a policy with a larger payout that will allow the family to pay off your bills, such as your house, and have some cash left over for living expenses.
Having a larger amount of insurance money can be important if, for example, one person is the major breadwinner in the family or if there are a lot of outstanding debts to be paid off.
You can buy insurance online today, from many different companies.
There are different types of life insurance products available, such as burial insurance, accidental death insurance, term life, or whole life. Which product may be right for you depends on your financial circumstances.
For instance, Globe Life offers Final Expense Insurance on their website for as low as $1 (which may be a promotional offer - I don't have Globe Life). This shows just how inexpensive it can be to protect your family.
Depending on which type of insurance you purchase, some may be only a few dollars a month, and for a policy that has a higher payout up to several hundred per month.
When you choose which type of policy is right for you and will fit your budget, you will probably want to get several different quotes to compare the coverages that you will get from the policy.
There are websites like E-surance that will allow you to get quotes from more than one company all in one place. That way, you can compare different plans to determine which one will be a good fit for you and your family.
Some policies will require you to get a medical exam. Some end after a specific amount of time (like 10 or 20 years), some last forever. Some will pay you cash values at retirement if you haven't used the insurance benefit.
As you can see, there are many different options, and it is important to research them carefully before selecting a product.
When you have kids, it is important to plan ahead for any worst-case scenarios. It can be difficult thinking about these type of things, which is why many people avoid end-of-life planning. However, it is an important way to be sure that our children are cared for, both physically and financially, if anything is to happen to us.
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