The following is a guest post from Chelsea Brennan, the founder of Mama Fish Saves, a personal finance blog that focuses on family finance, investing, and reducing money stress. Chelsea is an ex-hedge fund investor whose work has appeared in a wide array of publications, including Forbes, Business Insider, Haven Life, and more.
What follows is a topic that is probably the least appealing personal finance topic around: dealing with your own death.
It’s also one of the most needed.
When I interview millionaires, one of my standard questions is about inheritance, plans at their deaths, etc. My back-of-the-envelope stats tell me that well over 50% of them don’t have a plan for their deaths. Ugh.
But who am I to talk? Yes, I have a will. But that’s about it. It’s so old that it’s practically worthless. Yes, I have it on my “to do” list to get a new one, but that’s been on the list for five years now.
Then there’s the sidekick, my disaster file. Progress made here: zero. I’m daunted by the task of what to include, what I may miss, keeping it updated, and on and on.
That’s why I wanted to share this article from Chelsea — it’s an important topic that we all need to address. And if we don’t, there could be grave consequences for those we leave behind.
With that said, let me turn it over to Chelsea…
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Let’s start with a disclaimer. This isn’t a self-help, “live your best life now” post. I’m not going to talk about why you need to make the most of every day. That’s important, but this is too.
What if you actually died tomorrow? Heart attack, brain aneurysm, birth complications, car accident. All circumstances I’ve sadly seen or heard about with family and friends.
What situation would you leave behind for your loved ones? Are you really prepared, or only kind of prepared?
Basic estate planning such as life insurance, a will and healthcare proxy can cover some major categories. But life has endless moving pieces that are automatic to us. We do them seemingly without thinking and never consider mentioning them to anyone else.
But when we remove ourselves as the motor that turns the cogs, the whole engine stops. When your husband, wife, partner, child, or sibling don’t recognize that these cogs even exist, you risk leaving behind a mess.
So, let’s play a little Ghost of Christmas Future.
Here’s what untimely deaths and disasters can look like for those left behind. And what you can do about it.
The Realities of Picking Up the Pieces
If you’ve ever acted as an executor for an estate or lost a family member, you know how the aftermath looks. Endless phone calls, searching for documents, trying to navigate a system that made perfect sense to the person who passed. Even though it seems like complete nonsense to you. Or even worse when your loved one wasn’t prepared at all.
But if you haven’t been there, it’s hard to imagine. In fact, you’ve probably never even tried. So, I’ve got three stories for you from people who’ve been there.
“I’ll do it this week.”
Meet my friend Donna. Her husband handled most of the finances and investing. On one Friday, she asked him to write down some of the account passwords in her password notebook. She also wanted to walk through the regular bills and budget. He promised he would on Monday. But on Saturday he died of a massive heart attack.
Donna couldn’t access her husband’s email. Google will not provide passwords or login details, even of deceased individuals. With everything on paperless billing, it took months to figure out where they even had accounts.
She resorted to pulling cards out of his wallet and calling those financial institutions. Then using statements from those accounts to put together the puzzle. It’s been over a year, and she still unearths small things she’s missed.
“My husband designated the kids as his life insurance beneficiary.”
Angela’s first marriage was a bit rocky. During one of their difficult times, unbeknownst to her, her husband took her name off his life insurance policy. He named their three minor kids as beneficiaries instead. Angela and her husband spent most of their savings on building a home. And then, her husband passed away.
Overnight, Angela and her family went from well off to poverty. The life insurance policy was placed in conservatorship by the state. Angela could only use the money for an expense directly related to an individual child – like braces. But she couldn’t withdraw money for regular expenses like keeping a roof over their heads.
Her husband’s employer canceled their health insurance three days after her husband died. They were eligible for two years of COBRA but couldn’t afford it.
It took two months, but Angela got on state benefits. By budgeting carefully and being resourceful, she helped her family scrape by. She went back to school to get a degree where she could make more money and get better health insurance.
Today, they are doing much better. But did her husband know the real implications of naming a minor child as a beneficiary? Could he have foreseen the struggle that would follow?
“Everything is in the safe.”
My friend Michael has a more humorous, but no less frustrating story. His father was prepared. He had a will, papers organized in one place, and had told his kids where that place was. The large safe built into the house.
Only one problem. He didn’t tell anyone the code.
When he would remind his kids about the safe, he always mentioned that the code was written down in his office. But they never thought to ask where in his office. After he died, they ripped apart the room searching for the passcode. Then the drawers, then the whole house. They still haven’t found it.
Michael says they are talking to locksmiths now about what to do next. If they try to drill it out, they may not be able to repair it. And since the monstrosity is built into the house, it could be a problem.
Plus, Michael’s wondering whether he’s on some list for his many Google searches of “How to break into XYZ safe.”
So, what can you do to avoid one of your family members having to tell horror stories about settling your affairs?
Basic Estate Planning
Most people in the personal finance community are aware of our finances and essential estate planning. We know to tackle the four main things to protect our families financially.
- Life insurance policy: Insurance coverage, probably term to keep costs low, to cover any debts and provide for our spouse or children if not yet financially independent.
- Last will and testament and/or Living trust: Legal document telling our survivors our exact wishes regarding most (but not all) property and assets. The living trust can help avoid probate for specific assets.
- Beneficiaries: Life insurance policies, retirement plan proceeds, pensions, and certain investment and bank accounts can’t be assigned in a will. They are paid immediately upon death to a designated beneficiary. You should have named primary and secondary beneficiaries for these accounts.
- Living will: Advanced medical directive to outline the end-of-life medical care you wish to receive in an emergency. This removes the need for your family to make critical decisions when they are in an emotionally charged situation.
If you haven’t done these things, you should. But looking at the list, what do you see? There are already multiple different documents your survivors need access to. And things like debts, credit card accounts, and insurance policies for medical, home, auto, and long-term disability are notably absent.
The basics are just that. Basics. Essential to have, but not enough.
Emergency Preparedness
When it comes to emergency planning, untimely death is far less likely than a disability, temporary separation from kids or spouse, or natural disasters like fire or flood. A well-developed disaster file needs to include next steps for all of these situations.
The most common emergency situations I’ve seen where people aren’t prepared is around medical care. If you’re ever traveling away from your kids, make sure a trusted caregiver has a notarized medical power of attorney.
A doctor could treat your child without one in a life-threatening situation or when there is a risk of permanent damage being done by waiting. But without a medical POA, a non-parent caregiver can’t get your child treated for strep throat or X-ray and cast a broken arm.
But medical POAs aren’t just for kids. Every adult (over 18) needs to sign a durable power of attorney and a healthcare proxy. And it should be easily accessible in your disaster file. In most states, parents, siblings, or friends can’t make healthcare decisions, pay bills or manage money without one.
“I don’t even get a say.”
On July 3rd, an old hockey teammate called to say his younger brother had come down with Guillain-Barre syndrome. Jackson was in the hospital and on a respirator.
His mother was there but couldn’t direct care because Jackson didn’t have a durable power of attorney or healthcare proxy. The doctors kept her informed, but she didn’t get a say. A terrifying thing for any mother, but particularly one who had already seen her eldest child hit by a car at 17 and left permanently brain damaged.
My friend had contacted his brother’s employer and found out that he had opted for long-term disability insurance. But without a POA, they wouldn’t be able to file for coverage until he was well enough to do so himself. Or until his family got court approval to act on his behalf.
A quarter-million Americans between 18 and 25 are hospitalized each year with non-lethal injuries. 1 in 5 adults will be disabled at some point in their lifetime. Make sure someone you trust has a say in your care. And knows where to find the proof that they have it.
An Emotional Legacy
When my grandfather died of cancer at 65, I was the only one who knew how he met my grandmother. I was the only one who knew he was terrified of werewolves and put almost 100 miles on his car before he turned 16 driving up and down the driveway. I held all these tiny stories that made him who he was. Stories none of his six children ever thought to ask him about.
After my grandfather was diagnosed, I sent him a question once a week about his life and advice. The letters with his answers are more important to me than I can explain.
If you died tomorrow, what would you wish you told your kids and grandkids? What stories about your childhood? About career, marriage, parenting, and success?
As part of my emergency binder, I wrote notes to my boys and my husband. I answered some of the questions I had asked my grandfather when he was sick. And I wrote a letter to the person who we’ve designated to care for the boys if both my husband and I were gone.
Writing these letters was emotionally draining. But those pieces of me that seem so little would matter to the people who needed to read them. So, I recommend you write them too.
Complete Emergency File
A complete and well-maintained emergency file goes beyond the basics, even beyond ESI’s disaster file. It puts all the information you or your loved ones might need in a clear, organized format.
I recommend keeping your emergency file in hard copy and updating it once a year, or whenever a significant change occurs like a birth, move, or job change. A paper copy, versus a digital one, keeps your information more secure and allows you to put your original documents alongside your directions in one place.
Our binder sits in a safe in our home. My mom, in-laws, sister-in-law, and best friend know where the key lives. In case our home ever burned down, a copy also lives at my mom’s house.
Here are some ideas of what to include:
- Family Insurance Details: Home & auto, life, other insurance.
- Medical information: Doctors, allergies, and medications for all family members. Insurance and medical POAs.
- Information for Caregivers: If someone had to step in to care for your child or pet, what would they need to know? Preferences, activities, family traditions to maintain some consistency in a difficult time.
- Bills & How They Are Paid: What regular bills come in, when, and are they on auto-pay? If auto-pay is set up, make sure to note what accounts or credit card is connected.
- Investment Strategy: How to utilize life insurance or long-term disability proceeds to meet necessary needs over time. If you’re a DIY investor and your spouse isn’t involved, list people you trust from whom your spouse could get help.
- Employer information: Manager or HR contact information. Payroll details, any insurance policies through work, and PTO days.
As you compile a complete emergency file, be sure to keep things organized. If it feels like you are directing people back and forth to multiple locations, find a way to consolidate. If it seems even a little confusing now, it will be utterly overwhelming in a chaotic or emotionally charged situation.
Tomorrow, Next Year, or In Decades – We Need To Be Prepared
As a 28-year-old female that regularly exercises and doesn’t smoke or drink, my life expectancy is long. Crazy long, when it comes to retirement planning. A quick John Hancock estimate says I’ll live to 97. But I’ve seen too often that life has no guarantees.
Several years ago, my neighbor’s daughter Katie went to the hospital for leg pain. She was 31-years-old, had a beautiful two-year-old daughter and had done two tours in Afghanistan. The leg pain was coming from an old combat injury. No one is quite sure what happened, but a reaction to the meds prescribed meant she died in that hospital.
Her daughter’s father was barely in the picture, and Katie didn’t have a will. The conversations and family court appearances to decide who would raise her daughter were heart-wrenching, even from afar.
Then, a close and beloved family friend visited my in-laws for Hanukkah. He was in his early 60s, active, healthy and had just returned from a trip with his girlfriend of over twenty years.
Two days later, he died in his sleep from a heart complication. He had a will, but his estate was difficult. He wasn’t married to his girlfriend and assets weren’t in both of their names. It took over a year to sort out.
I hope and pray that someday I get to meet my great grandchildren. I know statistically, I’ll be there for both my boy’s high school and college graduations, marriages, and children. But I also understand that statistics are useless when you’re in the middle of it.
If something happened to my husband or me, the other would be buried in grief. We would be focused on wrapping our arms tight around our children and trying to give them the love and support they needed. We would be sick of making phone calls and fielding questions.
But at least we would have the answers at our fingertips and know how to keep the cogs of life in motion.
Michael says
I’ve actually done every single one of these items except to make a binder. That’s my first task this weekend. Thanks.
Paul says
Really dissapointed in the binder. Would not have spent $19 on it.
I viewed this before purchase as one place to get all the information if I died. In reality, it truly is an “emergency binder” so asks for phone numbers for police (911?), ambulance (911?), fire company (911?).
Just google information needed in a emergency and you have this binder. Max you should pay for this is $5.00, ad thats if you literally have NEVER thought of this topic before.
I asked for a refund.
Chelsea @ Mama Fish Saves says
Hi Paul, sorry you were disappointed in the product and will uphold my 100% guarantee refund policy.
However, there is a lot more information included than the phone number sheet in the first page of the binder. Medical information, bills, account numbers, investment methodology. Everything an executor would need is included.
This binder is meant to help a family member, or you, in any emergency. Not just death, though that was the focus of this particular article.
The phone number sheet you refer to is commonly needed by parents leaving their kids with baby sitters, so I included it as we often pull that sheet out and leave it on the counter for our sitter or when our kids stay with their grandparents overnight. While 911 is the number for an emergency, it isn’t the number to just call your local department. If you want to have someone check that a car seat is installed properly in your car, you need to call the station and need that number. Similar if you need to transfer ownership of a firearm after someone’s death and need the right forms. That sheet is a reference form for regular use.
None of this information is necessarily new. You could google for each thing on the list and compile a similar document. But at over 90 pages it would take time and many people aren’t certain they are compiling the right things. The purpose of the product was to save you the time of doing so, and to remove a barrier in actually putting together an emergency binder by putting it in worksheet format that you could easily save in a secure place or print for easy access for your family.
I will refund your order now.
ESI says
Here’s my take on the issue.
For almost any money-related task, the options for how to address it range from free/DIY to expensive (having a professional do it.)
In most cases, I choose to do it myself, mostly because I feel I know more about the subject than most others.
An exception to this is that I use a CPA to do my taxes (expensive option) because it saves me time, money, and frustration — much more than the cost of the CPA.
We are doing our estate plans with a lawyer as well — something we don’t want to mess up. Yes, you could do this yourself as well and anything above free could be considered excessive. To me it’s something I don’t want to mess up, I have the money, and I want it done right.
With this sort of challenge (creating an emergency binder) you have the same choices — free (DIY) to expensive (having a lawyer walk you through it).
This product is on the lower end of that range and to me and certainly provides guidance in an area where I’m looking for a bit of help. Could I Google around and piece it together myself? Of course. Do I want to spend that time and effort and still not know if I covered everything? Nope. I’d much rather spend $19 and be guided a bit through the process. That’s what makes this guide well worth it IMO.
BTW, there’s a similar product on Amazon that I reviewed several years ago. It’s not as good and is priced at $23, FWIW.
Anya says
Hi ESI,
You mention the binder is $29 but when I go to the site it’s $39. Is there a discount code? I think $29 is a reasonable price but hesitate at almost forty bucks.
Thanks a bunch. Love your blog.
ESI says
They changed the price. It’s now $39. No discount I know of.
I’ll update the post.
D.C. says
Thank you for providing information on this all important topic. This has come at a good time for me as I have learned the hard way how challenging it is when the “unexpected” happens in your family. In June 2018 we lost our dad unexpectedly in an accident. And although my parents (77, 78 years old) had some planning taken care of. The plans were incomplete. It is so important to have update and complete plans. Example: If you are going to take the time to spend good money on using an estate planning attorney to create your living family trust. For your families sake, take the time to put your assets in the trust. Keep bringing good content to ESI.
Kristy says
A very good topic & well thought out. Thank you for the story experiences — these instances happen everyday to folks who are not expecting it. We all hope we have time to do these things. We don’t – any one of us could die tomorrow.
As I nudge my husband along the way that we get our wills written this year….We have purchased our burial sites, and headstones. When they were installed this spring, he immediately texted photos to our kids (they were not prepared to see them)! Our oldest (24) was kind of shocked at seeing this, and he told her it was one less thing they would have to think about/take care of when the time comes.
I do have an emergency binder of sorts, with many of the documents, contacts you list — not in a formalized enclosure (binder) but I have started it. I have included friends & family’s phone numbers to call, and when to call (when/with service details) who to lean on for help–
my burial wishes (shared with our kids, too)
where to find what documents / regular household bill paying info, and how paid (if auto-pay, etc)
where vehicle titles, financials are stored
my annual “state of our union” finance review
It’s not perfect, but it is a start!
My siblings & I recently went through estate planning with Mom. All the legal, title matters are taken care of. But there are some little loose ends yet, I would like tie up.
Scott-e says
My parents are making me the executor to their will in the next year or two when they retire. This binder sounds extremely helpful, and I’ll be sure to get myself a copy when the time comes.
Like yourself and ESI mentioned above – I’m sure it’s fairly straightforward information that I could google, but this will give me peace of mind that I have everything covered.
Great post!
getagrip says
I will say I am surprised by the medical POA need for adult children, though it makes sense in hindsight. I guess after all those years as a parent being in control of their care you just assume it continues. That is something I have to discuss with my kids and something I would think most parents need to think about.
One thing that struck a cord with me was that we tried to get my mother to put down family stories to share with our kids and she never did, and often never spoke about things even when asked or prompted while they were around. Yet I have memories of stories she told me. We even bought a book with questions and ideas she could fill in and I told her to go ahead and write in her native language if putting it in English would be an issue (which it shouldn’t have been). Frustrating. One plan I have it to write down a number of small anecdotes from my life for any potential grandkids and for my own kids now.
Debbie says
I recently bought this ICE binder and I would do it again. As a 62 year old, I found that a lot of the information did not apply to me. The binder is more geared toward young families. HOWEVER, I still believe that it was well worth the price! It got me started. I still have a lot of work to do, but I now have all of our bills, asset accounts, and debt account listed with account numbers, websites, passwords, and instructions for my husband or kids if something happens to me or both of us unexpectedly.
I recently was the executor of my mother’s estate. It was probably one of the easiest estates to handle because she had very little, but it still made me realize how important it is to have things prepared and organized in case something happens to you. IT IS THE BEST GIFT YOU CAN GIVE TO YOUR FAMILY!
And I LOVE having family stories and traditions included in the binder! I recommend it!
And for young families, it is even more important to have this information gathered and organized. I have seen young children put in very unfortunate situations when the courts become involved in making decisions for them!
Whether you buy this binder or do it on your own. Do it!
BSue says
Estate planning has interested me for years ….maybe because we are natural advance planners in our family and my mother is 100 and counting.
I have organized her affairs a bit differently. We have a “grab and go” plastic folder with everything needed for an emergency room visit or doctor’s appointment – list of meds and medicine allergies, list of previous surgeries, all doctors’ contact info, healthcare power of attorney, advance healthcare directive, copies of all insurance cards and government ID, key family members’ contact info, etc.
In fact, we maintain a “Grab & Go” file for each family member who we are likely to accompany, and we keep these in a kitchen cabinet near our car keys.
Then there is the Executor’s File which contains some duplicate info, but also all of what the list above mentioned. It also contains funeral plot deeds, prepaid funeral services documentation, and a separate file on the funeral- draft obit, obit picture, who to contact from Social Sechrity, pension sources, to alumni organizations. Potential pallbearers, preferred singers, pastors, flowers, Bible verses and poems. We also have already collected 50+ pictures in digitized form to be used in a video. After all, 100 years is a LOT of living.
For very close friends, I have reviewed their estate plans and almost immediately catch inconsistencies between the wills and the beneficiaries. And then there are the designated agents or executors who have already died that require updates.
I guess you could say we want to have the last word, and certainly do not want our state’s intestate laws and local courts making decisions for us even after we are gone.