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How to Handle Your Family’s Financial Future

Providing your family with a comfortable life is a continuous effort, and ensuring your family’s financial security for the future takes smart planning. You wouldn’t want your spouse and kids caught up in the financial legalities in court, merely due to the unavailability of your will. This important document dictates who gets your assets after your demise, even in a god-forbidden early and unexpected one.

1. Pay Off Your Debts

It isn’t uncommon to take a home loan, business loan, etc. to help you meet your short or long-term needs. However, the sooner you clear off these debts or loans, the better. Having your family being pestered for payment, should something happen to you, is highly undesirable.

2. Estate Planning

Regardless of whether you have substantial wealth or not, it is sensible for just about anyone and everyone to have an estate plan prepared. As per LegalZoom, about 77% of Americans believe that estate planning is significant to everyone, irrespective of their wealth. With estate planning, friction among kin of the deceased can be avoided, and it’s also helpful when there isn’t much clarity about the natural heirs.

Surprisingly, 60% of Americans have no will. Estate planning includes preparing the tasks that serve the management of an individual’s assets including home, finance, properties, etc. post their death or incapacitation. You could do this by yourself or hire professional help for its preparation. If you’re wondering about the purpose of a will, here are a few:

  • You decide how your assets get divided, thereby minimizing fights among family members. Who gets what is clearly stated in this legal document.
  • A will can prevent your family from facing greater legal challenges or your estate passing on to an unintended individual.
  • Apart from declaring who gets what, you could also disinherit individuals to whom you don’t intend to pass on your estate.
  • Nominating a person to close down the affairs of your estate is done through a will. This person would be responsible for paying off bills, completing all bank-related formalities, and notifying the bank and others who need to be informed.

3. Take Insurance

Life is uncertain and can take an unexpected turn for the worst at any moment. For the comfort of your family in terms of financial security, insurance would be a good investment. While there are dozens of insurance types, the following three are the most important:

  • Health Insurance – Despite trying to save money year after year, should a medical emergency or surprise surgery crop up, it is most likely to leave you in the lurch financially. With health insurance, you can be assured that most of your expenses will be covered. All it costs is the annual premium depending on the coverage and plan that you’ve selected.
  • Life Insurance – It is highly recommended to take term life insurance for yourself and your working spouse. Ideally, taking out 10 times of your income would be a good choice.
  • Long-Term Disability Insurance – If a serious injury or illness was to befall you, it could render you unable to work for a while, at times for long durations. Unfortunately, this would also mean no income for that duration. However, with long-term disability insurance, you’ll continue to be paid. Although it does cost a few dollars a month, it’s a rather beneficial component to help keep your peace of mind.

It’s better to invest a few dollars today to assure a better tomorrow for your family. Get all your legal documents sorted sooner for clarity on estate matters and to avoid any nasty fights between family members.