Next up on Lessons I’ve Learned as the Spouse of a Financial Planner is discussing the necessity of estate planning. More explicitly, I’ll be delving into why discussing your death is a must.
It’s natural, most do not wish to think of their own death. Life may be a wild ride, but typically regarded as one worth riding on. However, your death is inevitable and will impact your loved ones. Like most important conversations, talking about your own death is awkward, but necessary. No matter where you are in your life, ask yourself “What would life look like for those around me if I were to pass?” And ensure to go deeper – what are the financial implications for my loved ones?
In the case of Matt and me, we are both young and healthy. We have been married shy of two years, and our lives are already completely intertwined, emotionally and financially. For example, our financial plan includes a mortgage that would ideally have both of our income streams. If Matt were to pass unexpectedly, I would not be in the position to maintain our home with solely my income. Let me ask you this – would you want to uproot your spouse in the event of your unexpected passing?
Another example is childcare. We are not yet parents but hope to be in the next few years, and our current plan is to have part-time childcare at such time. If I were to pass, again unexpectedly, that childcare budget would need to look different, likely double, if Matt were to be left to handle it alone (and vice versa).
I hope by this point you are thinking through ideas of what your family may experience in your absence if you haven’t already. If you have only just started exploring these ideas, the first step is to open the dialogue. It is certainly uncomfortable, but not as uncomfortable as leaving your loved ones in a financial nightmare in your absence. The next step is considering solutions to the undesirable, possible occurrences.
Being proactive is the best thing you can do in present day, and that is likely in the form of an estate plan. Such a plan would detail your wishes in the event of your death. As a part of that, it is important to consider the day-to-day funding that may be desired if your nest egg is not fully funded to support your family for decades (which it likely is not). That is where term-life insurance comes up. There is a plethora of options, including whole life insurance options Matt will dissuade you from (another blog for another day!). The idea you could contribute, let’s say, $600 a year to secure your family’s financial future is a smart safeguard. Yes, you may ultimately “waste” $40K over the next few decades, but providing that assurance to your family should be near-priceless.
Death is sad and uncomfortable to think about, but an imperative in order to have a financially smart future for your family. We have a policy for Matt’s life to protect me if something were to happen to him and intend to procure a policy for me after we have children. In mushy terms, we love each other enough to consider the consequences of an unexpected passing. I hope to have the next lesson(s) be on a light note! Until next time.