Taking care of your personal finances is part of being a responsible adult. There are numerous financial planning essentials that are your responsibility to acquire as you grow older. Although it may be unpleasant to think about, everyone will eventually age and pass away. Making sure your financial house is in order before you die is one of the best things you can do to spare your loved ones any financial hardship. If you want help understanding the financial essentials you should take care of, the following are a few financial documents you should acquire before you die.
Life Insurance
Purchasing life insurance is essential even if you don’t have any dependents to take care of financially when you die. Life insurance can often be used to pay for funeral expenses, meaning those around you aren’t responsible for your final send-off. If you do leave behind children or a spouse, life insurance can help ease their financial burden as they recover from the loss of your income into the household.
Will
Having a will is essential for sound financial planning. Make sure your will stipulates what you want to happen to your possessions and what should happen in case someone challenges your will. You don’t want your family left with the burden of deciding who gets your possessions.
Medical Power of attorney
A medical power of attorney is a financial document many individuals overlook. Having a legal medical power of attorney document drawn up means your family won’t have to make crucial medical decisions should you become physically incapacitated. Cover everything from feeding tubes to amputation and life support to ensure you are in complete control of your medical future.
Estate Tax Preparation
Estate tax preparation documents are another essential personal finance document all responsible adults should have as part of their estate planning efforts. Even if you don’t have a sizable estate when you die, there will likely be death taxes that need to be paid. Taking care of your estate taxes before you pass away relieves your loved ones of the burden of paying for your final taxes out of their own pockets.
Make sure you have these four personal finance documents in place and you’ll be on your way towards becoming a financially responsible adult. Taking care of death documents doesn’t mean you are being morbid; it simply means you are attempting to lessen your final burden on those around you.
