Before Resting in Peace: 6 Ways to Plan Your Legacy
Published: July 20, 2015 | Updated: June 26, 2020 | Posted by: Carlo Miguel Castañeda | Personal Finance
Memento Mori, or “Remember that you will die”. The fact is that somewhere, sometime down the line, we will die. Everyone would like to pass away peacefully, at a certain age, and surrounded by loved ones.
Talking about what happens to you and your family after you die is never easy, especially if you are the main breadwinner. While the conversation can be uncomfortable, it’s something that has to be done in order to ensure your financial legacy.
You can never really plan to die, but you can plan your legacy as early as now. Here are a few places to start.
A will determines where your assets go upon your passing. Your last will and testament is a binding legal document that bequeaths all material and monetary assets, as well as items of sentimental value that you leave behind to the people in your life.
Why talk about it: If there’s one thing that telenovelas can teach us, it’s that the things that you leave behind are something to fight over. A will can diffuse most conflicts over the distribution of your assets.
Power of Attorney
A “power of attorney” is another legal document that authorizes someone you trust implicitly to carry out decisions on your behalf if you no longer have the mental capacity to do so. In cases of debilitating sickness, for example, the person with power of attorney decides whether or not life-saving medical care will be given to you based on your instructions.
Why talk about it: You must choose someone that you trust implicitly, with the mental and emotional fortitude to handle everything that you ask them to. This gives them power to enact the decisions you need to make regarding all aspects of your finances and health.
A trust is different from a will in the sense that your assets – or a portion of it – are used to fund it. Remember that your estate is made up of everything you have ever owned, regardless of your status in life. A “living trust” is a version of this that takes effect even while you are still alive.
Why talk about it: A trust can hold any of your assets – cars, homes, wealth, etc. – and bequeath them to someone at the right time. This is especially true if you have kids who aren’t of age yet.
You’ve heard life insurance policies mentioned in the home at least once or twice. This form of insurance provides some financial relief in the form of a payout settlement to a person or people named as beneficiaries, if done correctly.
Why talk about it: A life insurance policy assures that your family will at least have something to take care of their needs should you pass away suddenly.
A funeral is a complicated affair. Funeral home expenses can add up quickly. There’s the choice of a coffin for a burial, or an urn if you are to be cremated. Costs for a wake can be anywhere between Php 15,000 to 30,000. Cremation can cost Php 20,000 to Php 150,000. Burial plots and fees for services and other expenses not mentioned here can also cost thousands of pesos.
Why talk about it: As morbid as it may seem, planning the funeral rites in advance can save you money. Not only that, but pre-planning your funeral lessens the emotional burden of the event for your family and loved ones. This way, they won’t have to make tough calls while dealing with grief at their loss.
Let’s be real: one of the lasting legacies a person can leave behind is the life they chose to bring into this world. In the event of the untimely passing of one or more parents, a legal guardian of your choosing will be in charge of making sure your child is safely raised.
Why talk about it: While the obvious choice is your closest living relative, a guardian must be someone you know and trust enough to make sure your children are well-cared for. The guardian you appoint must also be capable enough to help your child manage the assets you’ve left behind.
Planning for what happens after you die may not be easy, but it makes sure that you have no unfinished business, and that your loved ones are provided for when the unthinkable happens.
Have you started preparing for the inevitable? Or will you put it off for now? Either way, let us know in the comments!