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Episode 224 - The Financial Side of Losing a Loved One

In today's ever-changing world, preparing for unexpected tragedies and end-of-life scenarios is essential. Brad Nelson, the founder of Debt Free Dad, shares his personal journey and insights on building financial resilience in the face of adversity.

 

Embracing Financial Planning for the Worst 

Life's uncertainties can strike at any moment, whether it be a sudden illness, an accident, or end-of-life considerations. Having a robust financial plan in place can provide a sense of security and ensure your loved ones are supported during challenging times. 

The Importance of Organization and Preparedness 

Brad emphasizes the significance of organizing your finances and getting them in order. From paying off debts to setting up emergency funds and saving for retirement, having a solid financial foundation can make a significant difference in times of crisis. 

Creating an "If I Die" File 

Create an "If I Die" file. This file should contain essential information such as social security cards, bank account details, investment accounts, insurance policies, and passwords. By having all this information in one place, you can make things easier for your loved ones to handle your affairs. 

Updating Beneficiaries Regularly 

Ensuring that your beneficiaries are up to date on all your accounts is crucial. Life changes, relationships evolve, and it's essential to review and update beneficiaries as needed. This simple step can prevent potential complications in the future. 

Securing Life Insurance 

Life insurance is a vital component of financial planning, especially if someone depends on their income. You must have life insurance in place, if you can get it, to provide financial protection for your family in the event of an unexpected loss. 

Establishing Legal Documents 

In addition to life insurance, legal documents such as wills, durable power of healthcare, power of attorney, and trusts play a crucial role in outlining your wishes and ensuring they are upheld. These documents serve as a guide for your family and help prevent any misunderstandings or disputes. 

Seeking Professional Guidance 

While tackling financial preparedness can seem overwhelming, seeking assistance from an attorney specializing in estate planning can provide invaluable support. Investing in professional guidance can offer peace of mind and ensure that your financial affairs are in order. 

Resources Mentioned

Get better results with your finances in 30-60 days - GUARANTEED. Watch this video to learn how! - https://www.debtfreedad.com/payoff-debt-in-60-to-90-days 

Free Tools and Downloads at www.debtfreedad.com

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Episode Transcript: 

Brad Nelson:  

In today's episode, we're going to be tackling a topic that's both uncomfortable and essential preparing your financial life for unexpected tragedies and end-of-life scenarios. Now, life can be unpredictable, and while we hope for the best, it's vital to plan for the worst, whether it's a sudden illness, an accident or an inevitable end-of-life considerations. Having a solid financial plan in place can alleviate a lot of stress and ensure that your loved ones are taken care of during some of their most difficult times. Now, in this episode, we're going to explore some practical strategies for building resilience in the face of adversity. I'm going to be sharing some of the things that I've learned this past year after losing my spouse, and we're going to be discussing steps that you can take to protect yourself your family, financially in the face of tragedy. Stay tuned, hey everyone.

Brad Nelson:  

I am Brad Nelson, founder of DebtFreeDad, and I have paid off about $45,000 in debt. I have been debt-free now for 11-plus years, outside of my mortgage. I've also helped thousands of other people save and pay off tens of millions of dollars with the work that we do here at DebtFreeDad. Now, after listening to this episode, if you want to take your finances to the next level, we've got an amazing resource that can show you how to get better results with your finances, no matter what your situation is in just the next 30 to 60 days. I'm going to be sharing some information about that later on in this episode.

Brad Nelson:  

So, guys, today we're talking about tragedy, end-of-life scenarios, unexpected passings, and this is not meant to be an episode that's going to be all-inclusive. It's going to include everything that you need to know. It's more of just a gentle—let's not say gentle—let's say a hard shove to start thinking about some of this stuff, because I have just went through the worst year of my entire life after losing my spouse, and I have a firsthand experience of understanding what this all feels like, what you go through, the stresses that are involved and, from a financial standpoint, there is a lot—a lot—to think about when it comes to what if, and a lot of people have these what ifs happen, and it's easy to sit here and say, well, that stuff's never going to happen to me, but the reality is is they can happen to any of us. In fact, I've been posting more and more content about this on social media. It's amazing A wide range of people, no matter what their age, who have experienced some loss and have experienced a lot of the stress because they didn't have their financial affairs in order.

Brad Nelson:  

They didn't have end-of-life scenarios in mind. Not, you know, the one spouse or one partner didn't know what was going on with the finances, and a lot of them have said things like it was the most stressful time of my life. One person even said it was living hell. So today, this episode just serves as a—again a push to start thinking about this in your own life, because if you haven't done so, this can be one of the biggest hugs that you give your family if something unexpected happens to you. So number one I would just say and obviously, if you're listening to this podcast, hopefully you're already having this as a goal is to just get your finances organized and in a better place.

Brad Nelson:  

Think about this If your finances are already stressful, if your finances are already a mess, imagine passing away and now having to hand that over to somebody else. Now somebody might say, well, I don't care, I'm not going to be here. Well, is it the other person's responsibility to bear the stress of your financial mess? No, it is not. Whether you're married, whether you're single, it does not matter what it is have your financial affairs in order. This is probably one of the best things that we did many years ago and we got ourselves out of debt. We had our finances organized. We were saving regularly for our emergency fund. We were saving regularly for retirement. We had our stuff together. I can't imagine going through this past year without doing the work that we had done. I can't imagine going through that with all of the extra added weight and financial stress, living paycheck to paycheck, credit cards, car payments and all of that kind of stuff. I probably wouldn't have financially survived. In fact, I know I wouldn't have financially survived. But being debt-free, being that we worked on our finances, being that we made our finances a priority, we had everything organized. Was it perfect? Absolutely not right, but it did make this year a lot easier to maneuver and manage and work through because of all the work that we had done on our finances.

Brad Nelson:  

So the first thing I'm going to recommend you do is create an if-I-die file. Now I get it right. Nobody wants to talk about this stuff. These are not fun conversations. This is why we avoid it. Nobody wants to think about these things. They're sad, they're not exciting and, downright, some of the questions that you have to think about are not easy to think about. They are hard, and that's why a lot of us tend to ignore it. If I die file, these things should be carrying things like all of the information about you your social security cards, your bank accounts, any credit card accounts, debt accounts, car payments, any of those types of things All of those things should be in this file. Now, you could put this all on a spreadsheet too account numbers, all of that. However, you want to do this and organize this, make sure you have. If you have, investments or any sort of savings, things like that make sure you have information about where to find all of those things. If you have real estate, obviously you want to include any of those things. If you have things like insurance, especially life insurance, you're going to want to make sure you have all of that in this file.

Brad Nelson:  

If you have passwords, like, for instance, for your phone, have the password to your phone. Now, again, you got to make that decision for yourself. I know a lot of us probably keep some weird stuff on our phones, right, but you know you got to make the decision of who's going to have access to your phone because there's going to be a lot of information that can be found on your phone. I know, when my wife passed away, there were quite a few things especially because she ran her own business that I had access on our phone. Now I knew her password so I was able to get in and be able to do the things that I needed to do after she had passed away. Not having that password would have made my life a lot more stressful, trying to get things closed and all of her affairs in order after she had passed away. Also, make sure you've got, you know, email passwords, user names, passwords for all of your accounts.

Brad Nelson:  

Like put all of this stuff in an if I die file and even if you have to type up just a short summary of hey, this is where all of my stuff is, this is how I get it. Here's the people to talk to, like your insurance agent and your investment advisor. Like just have all of that stuff in order and in one place. And by all means, you know this isn't going to be something that's going to take you, just you know, an afternoon. It's probably going to take you a couple of weeks, maybe even a few months, to get all this stuff kind of put together, but I can guarantee you it's going to be super helpful if something were to happen to you, people know what to do. This is especially important if you're in a relationship and one of you is responsible for doing the finances. The other person can easily get this file and pick up right where the other person left off and can begin to start working through the finances and taking over those responsibilities. The other thing you want to make sure you do on all of your accounts is regularly be updating your beneficiaries. All right, so, on your checking account, on your savings account, on your investment accounts anything that you need a beneficiary for make sure you're regularly updating those. Now, again, I say regularly updating, because life changes, relationships change, people pass away, right, you want to make sure that you're regularly updating those so that way, if something were to happen to you, the beneficiaries are good and they are active.

Brad Nelson:  

The next big probably maybe the biggest area, especially when it comes to a spouse or a partner unexpectedly passing away, is to look into getting yourself life insurance if you don't have it. Last statistic I read is upwards of 40% of Americans do not have life insurance. Now, again, I understand that if you have health conditions or things like that, it might be more challenging and difficult. Obviously, this isn't necessarily for you and yelling at you to go get it right. This is for anyone who is healthy and can get it. You should get it.

Brad Nelson:  

The number one rule of thumb is if someone depends on your income, you need life insurance. That's it. If you have kids, they depend on your income. If you have a spouse or partner, they likely depend on your income too. Even if they're working, they probably depend on your income to help with the family finances. Well, if you're gone, what do they have left? Nothing, right? So that's why you want to have this life insurance in place. Right, so that's why you want to have this life insurance in place.

Brad Nelson:  

Think about how much more stressful it's going to be now and now you're leaving your family with nothing, and I can't tell you the amount of horror stories that I have heard over the years being a financial coach, working with people where spouses or partners passed away. No life insurance in place, and it ruins the family that's left. They have to move, sell things. It completely turns their whole world upside down. On top of having to now grieve for your loss, that is a tremendous amount of stress and a lot of sadness that goes along with that. All right, so I would recommend go out there and at least get yourself.

Brad Nelson:  

I recommend term life insurance. We're not going to get into the whole term and whole life debate here in this episode, but term life insurance gets the job done. It's typically very inexpensive, especially if you're healthy, and again it replaces that income if, for some reason, you were to pass away. Now again, I don't want to hear this excuse. A lot of people will say, well, I'm not going to be here, so I don't care. Well, then you're basically saying you don't care about the well-being of your family because that's who it's for. For you, this life insurance is for the people that you leave behind so they can take care of any necessary expenses after your passing and continue to move on in life and even move on and build a new life later on.

Brad Nelson:  

The last area, and just as a recommendation, is to look at things like getting a will, getting a durable power of healthcare in place and getting a power of attorney in place and even going to the extent of maybe establishing a trust. These documents are essentially an instruction manual for your family on how you want your affairs handled if you were to pass away and again I'm going to go back to that saying of a lot of people just say, oh, just do this with me and don't make it a big deal, and just these passing comments, right, but no real written instructions on what you want. Do you want to know what happens in those situations? I've worked with families in those situations from a financial standpoint and it tears families apart because you've got one family member who thinks this person wanted this. You got another family who thinks that this person wanted this and all it does is create a lot of drama in the family. That is unnecessary.

Brad Nelson:  

Again, having a will, having a durable power of healthcare, having a power of attorney, having a trust, is simply putting your affairs in order and saying these are the things that I want, and it removes the responsibility of having your family make those decisions for you. And I'm here to tell you, after someone who has gone through this this past year you don't want your family having to make any more decisions than they have to, because they're going to have to make a lot already with your loss. So take some of that stress off of them. Get this stuff done. It is not hard, it is not complicated. It does take a little bit of time. Yes, there can be a little bit of investment of money, but I can guarantee you it is some of the best stuff that you can do for your family. It is that hug, that final hug that you can give to your family to say that I wanted to make this easy for you if something were to happen to me and again, it's not about you, it is about the family that you are leaving behind.

Brad Nelson:  

Also, when it comes to things like if you have a spouse or a partner, what if you got kids? You know, if something were to happen to both of you, what happens to your kids? If you don't have that written, guess who gets to decide? The government, right, we don't want them to decide. So you need to take time and decide. What are your affairs going to look like if something were to happen? And these are the questions that you need to go through step by step.

Brad Nelson:  

Now, me personally, I would recommend hiring an attorney to walk this, walk through this with you. There are people who say, oh, they're going to charge me so much money. To me, it is a damn good investment to hire an attorney that especially specializes in estate planning and have them go through this stuff with you, especially if you have a more complicated A lot of us have complicated living situations split families. You might run your own business I mean, there's a lot of stuff involved at times. Have an attorney set the stuff up for you. It was one of the best investments that I made and the peace of mind knowing that all of my stuff is in order, if something were to happen to me, that my kids are going to be okay it's priceless.

Brad Nelson:  

So again, in closing today and this just short episode, guys, is I just want to give gentle nudge to you - more of this hard shove to get this stuff done. If you have not done this, this is adulting. We are all going to pass away. We just don't know when. If you have a family, the best thing that you can do for them is get some of this stuff in order for them and if something were to happen to you, you can have peace of mind knowing that your family is going to be okay. Hey, if you want to pay off debt, save more money and end financial stress for good, head over to debtfreedad. com. Click on the green button at the top of the page and we're going to show you how you can get guaranteed better results with your finances in just the next 30 to 60 days. Go check it out. Hey guys, thanks for joining us on this episode and we will see you next week.

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