Search: mortality

Set Up Beneficiaries for All Your Accounts

This article was written by Flexo in Personal Finance. 11 comments.

While anyone moves towards financial independence, there is a time to think about what would happen to one’s financial accounts if one were to most unfortunately pass away. It’s a morbid thought, no doubt, and it’s easily avoidable in a world where talking about death is difficult. I don’t like to contemplate my own mortality, but realism must sink in as one grows older, particularly when and if life as a single person gives way to the start of a family.

Planning for the inevitable future can involve wills and trusts, but there is a rather simple step that could help potential heirs avoid some problems. Probate could prove to be expensive and problematic, and investors or savers can add one or more beneficiaries to most financial accounts to bypass probate. The beneficiaries named on any financial account will be able to receive money left behind in that account following the death of the account owner without involving lawyers or a hassle.

You can add a beneficiary or a payable-on-death (POD) to most savings and checking accounts. Sometimes, banks seek information about beneficiaries during the account opening process, but not always. Many banks don’t allow you to change beneficiaries online. For banks with brick-and-mortar branches, you may need to visit a personal banker with the beneficiary or with the beneficiary’s personal information (address, Social Security number, etc.) in order to change or add a designation. If you don’t see any options for adding beneficiaries online, contact the bank directly.

It’s also possible that some banks do not allow account holders to designate beneficiaries on deposit accounts. ING Direct is one such bank. Unfortunately, the heirs of the deceased’s estate could have problems receiving the balance in one of the most popular online bank accounts. If this is an issue for you, consider moving your money from ING Direct to a bank that allows payable-on-death designations. With a will or a trust, this designation might not be necessary. Of all the choices, however, POD is the easiest, and every bank should offer it.

Almost always, brokerages and banks will ask for a beneficiary when you open an investment account, whether the purpose of the account is short-term investment or retirement.

Don’t think that your accounts are too small to worry about how the funds will be distributed after you pass away. The accounts could grow, and even if they don’t, the funds you have could be important to someone in the future. With small balances, there is even more of an incentive to avoid costly probate fees.

If you’ve been through any sort of major life change, like a marriage, divorce, or the birth of children, you should take a moment to review your accounts to ensure the proper beneficiaries are listed. As a single guy, this hasn’t been a major priority for me, but as I age, I’ve started to recognize its importance despite the lack of a wife and children. This will be one of my first steps to ensure my funds get in the right hands at the right time, followed by creating a will.

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My Grandmothers and the Cost of a Funeral

This article was written by Flexo in Consumer. 14 comments.

Ninety-three years is a long time to live. My paternal grandmother was that age when she passed away this past Saturday. I attended her funeral, a graveside service, earlier this week. She lived in Florida, but she was flown up to Long Island to be buried with her husband, who died in 1968.

A couple of weeks ago, my maternal grandmother entered hospice care, with the doctors offering a prognosis of days or weeks, maybe months, due to Parkinson’s disease and, I believe, complications after hip surgery. She lives in California and is in her mid-eighties, and since receiving the news I’ve been mentally and logistically planning to travel out to the west coast at any time with one day’s notice.

I was then surprised when I heard from my father this past weekend that his mother had also entered hospice care. While my mother’s mother continues to have bad days and somewhat better days but is surviving, my father’s mother passed away after one day. My family in Florida held a ceremony for her on Monday, and more family in New York was on hand on Tuesday for the burial. This quick pace is not uncommon; Jewish funerals typically occur quickly, without a wake or viewing.

Occasions like these often bring together distant relatives who have been out of contact, and this Tuesday was no different. It was great to see relatives and friends of the family I had not seen in decades and meet other friends and relatives.

I wasn’t involved in the financial aspects of this event, but it was apparent that a funeral can be a very expensive event. Despite the morbidity of the though, a funeral should be financially planned. In our case, the plot was purchased a long time ago, when prices were surely much lower than they are now. In my grandmother’s case, I would imagine the transportation from Florida to New York was the most expensive part of the day.

How much does a funeral cost?

The National Funeral Directors Association conducts a survey every year or so to gather information about the cost of funerals across the country. As you would imagine, the costs increase every year. The 2006 survey produced these averages for itemized funeral services:

Item	Price
Non-declinable basic services fee	$1,595
Removal/transfer of remains to funeral home	$233
Embalming	$550
Other preparation of the body	$203
Use of facilities/staff for viewing	$406
Use of facilities/staff for funeral ceremony	$463
Use of a hearse	$251
Use of a service car/van	$120
Basic memorial printed package	$119
Subtotal without Casket:	$3,940
Metal Casket	$2,255
Subtotal with Casket:	$6,195
Vault	$1,128
Total Cost	$7,323

The cemetery where my grandmother is now buried also has a yearly fee for keeping the plot tidy but has an alternative option for “perpetual care.” Perpetual care is a one-time fee, currently $2,000 at this particular cemetery, that covers trimming the hedges and other landscaping.

The Federal Trade Commission requires funeral directors to provide itemized prices for all services related to the funeral, so make sure you ask as many questions as possible.

Planning for a funeral

In 1968, when my paternal grandfather died, the average total funeral cost was $708; in 2006, the average total cost was $6,195.

One of the best ways you can help those you leave behind afford this expense, if you can manage to help, is to set aside money to care for the events surrounding your own death. In the real world, there are many things that can get in the way of this planning such as the cost of health care. Even though there are often financial obstacles as you age, any consideration will help your family.

The first thing you could do, if and when you have settled down to live in a certain area, is purchase a plot in a cemetery that fits your family’s tradition or religion. Buying the plot in advance will save money down the road as the cost of plots and practically everything else associated with a funeral increases at a rate higher than inflation.

If it is not offensive to you, or your religion, cremation is a less expensive option. Consider cremation if this is aligned with your personal values.

Don’t forget to comparison shop. If you want until it’s too late, there may be pressure to make decisions quickly. This increases the chances of spending money unnecessarily.

For those looking to cut costs on a funeral, Christopher Solomon has suggestions for planning a funeral for $800 or less.

Coming to terms with mortality

I never said William Shatner is a great singer. His first album, The Transformed Man, established his status in music history as not a great singer. But paired with Ben Folds for the more recent Has Been, he came up with the poignant “You’ll Have Time,” which reminds us all that we are going to die at some point. “Live life like you’re gonna die, because you’re going to…”

There’s never been a better reason to stop procrastinating.

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Suze Orman’s 5 Tips for 2007

This article was written by Flexo in Tips. 6 comments.

We’re rolling into the new year, a perfect time for gurus to repeat their favorite nuggets of advice. Suze Orman, who writes a column for Yahoo Finance, has published the five best financial moves for 2007. Here are her tips, which don’t have much relationship to 2007 specifically, but are good ideas in general.

1. Lose Your Balance. Pay your credit cards off every month to avoid interest fees and late fees. I’ve been writing about credit cards lately, and I identified two types of credit card users. Type A users pay fees and do not pay down their balance while Type B users have mastered their credit cards by beating them at their own game. Suze says Type As should become Type Bs.

2. Make sure you rate high. ING Direct is falling out of favor, even with the major voices now. Suze says get your cash in HSBC Direct or Emigrant Direct where as of now it can earn more than 5% APY.

3. Win the match game. Invest enough in your company’s 401(k) to be eligible for the full company match. This is recycled from last year’s list.

4. Face your mortality. Suze suggests a term life insurance policy for protecting those who rely on you. This is not part of my 2007 plan, and won’t be until I’m no longer a single guy whose only dependent uses a litter box.

5. Stop kidding around. Here’s something I don’t hear often in the mainstream press. Suze says parents have a responsibility to teach their young children about personal finance and the value of living within one’s means.

I’m not Suze Orman’s biggest fan. I’ve seen her call-in television show and she can be nasty to the callers. I would assume the callers are familiar with the show and know what they’re getting into when they dial, but sometimes they seem to be taken by surprise. I was also not impressed when she started appearing in GM commercials touting the value of buying or leasing cars. This seemed to go against the values she reflected on her shows. For most people, living within their means would mean not buying or leasing a new car.

Nevertheless, when I can’t detect her attitude in her writing, I don’t mind her advice. It’s solid, but not particularly special.

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