I’m a planner. On my first trip to Walt Disney World, I probably spent eight months planning the trip, poring over guidebooks and making meticulous notes. I had plans, backup plans, and mitigations. This tendency has made me very careful in managing my adult life, and I thought I’d offer some tips, or at least things to think about. My impression is that very few of us are aware of how Bad It Could Be, so maybe this’ll help.
You Are Not Immortal or Invulnerable
I think the first thing to realize is that you’re gonna die at some point, and at the very least you’re going to get injured. Most people in financial troubles got there by being injured. So it’s good to plan for it.
Nothing is Automatic
You may think that because you’re married or whatever that everything will just work out for the best if you kick it. You’re probably wrong.
For example, your spouse can absolutely inherit anything in your name, but that stuff first has to go through probate in most jurisdictions, which can take weeks to months and can deduct 2-3% from the value of the estate to pay for the process. And even if you’ve jointly titled your assets (a good first start), what if you and the boo bite it at the same time? You’re dumping a load of crap on someone, that’s what. It’s best to avoid all the hassle if you can.
Step 1: Secure Your Digital Legacy
Start by putting your passwords – yes, all of them – into a password manager like LastPass that supports emergency access. Designate an executor, distant family member, or someone else as your Emergency Contact. If you eat it, or even just wind up comatose, they can request access to your passwords. After a timeout period you define (during which you can cancel the request if you’re alive), they’ll get everything.
Step 2: Stop Owning Your Stuff
Transfer, or jointly title, all of your fixed and financial assets to a revocable family trust. It is worth the $1000-$2000 a family lawyer will charge to draft this up (and that’ll include the other documents I’m about to hit on). This should include your house, bank accounts, and so on. Any insurance policies should be changed to name the trust as the primary beneficiary. Your trust will designate you and your spouse (usually) as trustees, and you can designate as many backup trustees as you want. For bank accounts, you can jointly title to yourself and the trust, so your day-to-day banking won’t be any different.
If you end up six feet under, none of your property changes hands, since the trust owned it all along. This avoids inheritance, probate, and all other manner of nonsense. You can leave private instructions to your trustees about what to do with everything, like donating it all to DevOpsCollective.org. Thanks.
Step 3: Leave Instructions
Don’t assume anyone knows what you want done in any situation. You need to write these things down, ideally with a lawyer to help, and get them signed and notarized. At a minimum, in the US, you need:
- A living will
- A last will and testament (which should cover anything you might have forgotten to put in the trust)
- A durable power of attorney for medical decisions
- Final wishes (bury/burn, type of services, etc)
- Do-not-resuscitate (DNR), if applicable to you
A lawyer will do the whole pack, including a trust, usually for around $1k-$2k. Do not do these yourself using forms from Office Depot. Your life is surely worth more than $29.99 to get it right.
Step 4: File All That Crap
You need to make sure someone can get to all of the above stuff. I’ve locked most of it in a safe, fireproof place, and noted that place as a Secure Note in LastPass. So when I meet my maker, my Emergency Contacts (I have more than one) will know where to go to get all the paperwork. That also lets me update the paperwork anytime I want to – so long as the updates go in the right place, they’ll be there.
Step 5: Insurance
If you have any insurance policies, call your agent and get declaration pages. Put those in with the other files from Step 4, and note the agent’s contact information in your LastPass vault.
By the way, you probably don’t have enough insurance. Take my specific case: back in 2011, Chris was run down by a car while he was (legally) in a crosswalk. The driver carried the state minimum of $15,000 for such an event, nearly all of which was consumed just by the ambulance and ER visit. The remaining $75k or so of treatments would have been out of pocket, except that we have lots and lots of cheap Under-Insured Motorist (UIM) coverage on our own policy (our limit is $500k and it doesn’t cost much). By carrying that limit, we were also able to get an umbrella policy for about $600/yr, which amongst other things added another $1M to the UIM coverage.
If we’d have been hit with $75k in medical expenses, we’d probably have lost the house, at least. Think about that. And go talk to your insurance agent. They see this stuff every day, and they’re not just there to gouge money out of you. It only takes one other asshole to make all those premiums worth every penny.
We have the usual homeowner’s and auto policies, along with that umbrella (which basically provides a cheap set of higher limits for everything). I also carry a long-term disability policy, since I’m the main breadwinner, which kicks in 6 months after a major disability and essentially replaces my income. Those aren’t cheap, but as I said… it only takes one other asshole.
Step 6: WHAT COULD GO WRONG?
Seriously. This is basically disaster recovery for your life. Look at all the stuff in your world, and in your head, and decide what happens to it if you get squashed. And then look at those plans and decide what could go wrong if someone else got squashed with you. It’s not terribly fun to think about (well, you can make a game of it), but it’s literally the last good thing you can do for your friends and family, should the inevitable come to pass.