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Britt Erica Tunick is an award winning financial journalist who has spent the past 17 years writing about virtually every aspect of finance. She has mastered the art of boiling down complicated financial topics for readers to understand. |
The importance of having a will cannot be over emphasized, particularly for anyone who is married or a parent. The Importance of Planning for the Worst By Britt Erica Tunick The importance of having a will cannot be over emphasized, particularly for anyone who is married or a parent. Unfortunately, if your family’s livelihood depends even partially on you, simply having a will isn’t enough to guarantee their immediate financial security after you are gone. As anyone who knows anything about the probate process can tell you the period during which a will’s authenticity must be proven, and during which time any title claims against a deceased individual’s property can be made the wishes an individual makes in their will are not automatically executed at the time of their death. Because probate can be an extremely lengthy process, particularly in states that levy death taxes, it is not only important to make sure that you keep enough money in your bank accounts to get your family through a year’s worth of expenses, but to make sure that money is accessible. In an era where it is not uncommon for people to wait until they are well into their 30s or older to get married, many couples maintain both separate and joint bank accounts. While there is nothing wrong with spouses keeping their finances separate, failing to name a spouse or a child as a beneficiary for your bank accounts can result in their having to navigate significant hoops in order to access your money once you are gone. Even if your will is air tight and beyond clear that a spouse or a child is to inherit everything, before a bank can provide access to your accounts it must first be presented with a copy of your death certificate, along with evidence documenting who has been made the administrator of your estate. But naming a spouse or children as beneficiaries of your accounts means that all they need to do in order to access your holding is to provide a copy of your death certificate. While keeping a large amount of money in cash may seem a bit excessive, particularly in light of the historically low interest rate environment that has existed since the 2008 credit crisis, most financial advisors suggest that couples keep a year’s worth of expenses in cash between them at all times enough to cover your mortgage, car payments, utilities, and any day-to-day living expenses. Keeping a year’s worth of liquidity readily accessible means that it will always be available should any sort of disaster strike, such as the unexpected loss of a job, and will give your family enough time to get back on its feet without having to incur any unnecessary debt. |
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