5 tough topics you should discuss with your loved ones during lockdown
Lockdown has us doing all the things we always wanted to do but never got around to. Spending quality time with our families playing card and board games, tackling that high-impact workout, baking up a storm, and family conversations on all kinds of topics.
But have you avoided some of the most crucial conversations? The following five topics may make you feel uncomfortable, because they deal with death, but they’re some of the most important things you should discuss with your loved ones.
Who will look after your children if you die?
This is a tough topic and many people tend not to want to discuss it – either because they find it just too difficult to contemplate or they think that their chosen guardian will consider it an honour. But not everyone welcomes such a surprise. Raising someone else’s children comes with costs – not only for day-to-day living expenses such as food and clothes, but also school fees and other essentials. Guardians will need to know how expenses related to taking care of your children will be covered. Additionally, you need to consider protecting your children’s financial future by setting up a Testamentary Trust to make sure that any funds you set aside aren’t being misused and are used for their benefit only.
What will happen to your debt if you pass away?
Wouldn’t it be great if lenders forgave our debts when we died? Unfortunately, the reality is if you pass away, your debt is paid from any available funds in your estate. Whether a home loan or car loan, credit card debt or cash borrowed from a friend, creditors can make a claim on your estate to be paid first. This can be devastating at a time when your family is dealing with other costs related to you passing away and it may mean they end up losing your home, intended for them, to pay off debts. Make sure your loved ones know your financial position and talk to your financial advisor about the best way for your family to settle outstanding debts should you pass away.
Who will execute your Will?
People often presume that a family member is the best person to help execute their estate. But winding up an estate is an administratively intensive process that requires both time and specific expertise. While you may ask one of your relatives to oversee the process, it’s best to appoint a professional estate administrator to navigate the financial and legal complexities. Although this may be for a fee, it can save you money in the long run. Some executors charge flat fees rather than a more expensive percentage of the estate, whilst others offer insurance solutions that can cover all these costs – so be sure to check that you’re getting a fair deal.
Who will pay for the fees related to your death?
Apart from funeral costs, passing away incurs many other unexpected costs. These include Executor Fees, Testamentary Trust Fees, Conveyance Attorney Fees, and Non-Estate Asset Fees. Covering these costs at the time of death can often be a huge expense. Speak to your financial advisor about insurance solutions that can help you cover these costs so they don’t hit your loved ones just when they’re trying to adapt to a life without you.
Do you have a Will in place?
Many people assume that their family will work out the details of dividing up their investments and possessions after they pass away. But even a simple estate can cause complications and family feuds. A Will is a set of instructions that clearly outlines what you want to have happen to your assets and dependants when you pass away. Drafting a Will doesn’t have to be a complicated or difficult process – some companies even help you draft or update your Will for free over the telephone, to help you ensure that you have a valid Will in place. Remember, for a Will to be valid, it has to be signed, in person, by you and two witnesses who don’t stand to benefit from your estate. It’s a good idea to keep two original copies of the Will – one at home that your family can access and one with a professional, such as your financial planner or estate administration company.
Alex Simeonides is the CEO of Capital Legacy