Important Things to Do Before You Die

Quick answer

• Organize your financial documents and accounts.
• Create or update your will and estate plan.
• Designate beneficiaries for accounts like retirement funds and life insurance.
• Inform a trusted person about your important financial information.
• Review and adjust insurance policies.
• Consider your digital legacy and online accounts.

Who this is for

• Individuals who want to ensure their financial affairs are in order.
• People planning for the unexpected or looking to secure their family’s future.
• Anyone who wants to reduce stress and burden on loved ones during a difficult time.

What to check first (before you act)

Goal and timeline

What are you hoping to achieve by preparing these documents? Are you focused on ensuring your assets are distributed according to your wishes, providing for dependents, or minimizing taxes? Your timeline will influence the urgency of certain tasks. For example, if you have immediate concerns about dependents, creating a will might be a top priority.

Current cash flow

Understanding your current income and expenses is crucial for accurate financial planning. This includes knowing your regular bills, any outstanding debts, and your sources of income. This information will be vital when updating beneficiaries or making decisions about estate planning.

Emergency fund or safety buffer

While this might seem counterintuitive for end-of-life planning, having an accessible emergency fund is essential. It ensures that unexpected expenses can be covered without disrupting your estate plan or burdening your loved ones. It’s a good practice to maintain a fund that can cover 3-6 months of living expenses.

Debt and interest rates

Compile a list of all your outstanding debts, including mortgages, car loans, credit cards, and personal loans. Note the current balances and interest rates. This information is necessary for your executor or beneficiaries to manage or settle your debts. High-interest debt can significantly impact the value of your estate.

Credit impact

While not directly related to end-of-life planning, understanding your credit score and history is always beneficial. It can impact insurance rates and loan applications during your lifetime. For estate planning, knowing your financial standing helps in estimating the net value of your assets.

Step-by-step (simple workflow)

1. Gather All Financial Documents: Collect statements for bank accounts, investment accounts, retirement funds (401(k)s, IRAs), life insurance policies, deeds, and loan documents.

• What “good” looks like: All relevant documents are in one easily accessible location, either physically or digitally.
• Common mistake: Storing documents in multiple scattered locations, making it hard for someone else to find them. Avoid this by creating a dedicated binder or secure digital folder.

2. Create or Update Your Will: Draft a legal document that specifies how your assets will be distributed, who will be the executor, and who will care for any minor children. If you already have a will, review it to ensure it still reflects your wishes.

• What “good” looks like: A legally valid will that clearly outlines your intentions and has been signed and witnessed according to your state’s laws.
• Common mistake: Using an outdated will or one that doesn’t comply with current state laws. Always consult with an estate planning attorney to ensure validity.

3. Designate Beneficiaries: For accounts like retirement plans, life insurance policies, and some bank accounts, formally name beneficiaries. These designations often override instructions in a will.

• What “good” looks like: Beneficiary designations are up-to-date and accurately reflect your current wishes for each specific account.
• Common mistake: Forgetting to update beneficiaries after life events like marriage, divorce, or the birth of a child. Review these designations annually.

4. Identify and Organize Digital Assets: Make a list of all your online accounts, including email, social media, cloud storage, and any digital subscriptions or assets. Consider how you want these handled.

• What “good” looks like: A clear inventory of digital accounts and instructions on whether to close them, transfer them, or leave them active.
• Common mistake: Neglecting digital assets, which can lead to accounts being lost, compromised, or inaccessible. Create a separate document for login information (stored securely).

5. Review Insurance Policies: Examine your life insurance, health insurance, disability insurance, and any other relevant policies. Ensure coverage levels are appropriate and beneficiaries are correctly listed.

• What “good” looks like: Policies are current, coverage meets your needs, and beneficiaries are accurate.
• Common mistake: Letting policies lapse or having insufficient coverage that won’t meet financial obligations. Consult an insurance agent if unsure.

6. Create a List of Debts and Assets: Compile a comprehensive list of everything you own (assets) and everything you owe (liabilities). This provides a clear financial picture for your executor.

• What “good” looks like: A balanced sheet of your net worth, detailing all financial holdings and obligations.
• Common mistake: Overlooking smaller assets or debts, which can complicate the estate settlement process. Be thorough.

7. Inform a Trusted Executor or Point Person: Designate one or two individuals who can access your important documents and understand your wishes. Provide them with the location of your will, financial statements, and other crucial information.

• What “good” looks like: Your chosen executor knows they have this responsibility and has the necessary information or knows where to find it.
• Common mistake: Not clearly communicating your wishes or the location of important documents to your executor. This can cause significant stress and delays.

8. Consider Funeral or Memorial Wishes: While not strictly financial, documenting your preferences for funeral or memorial services can ease the burden on your family.

• What “good” looks like: Your wishes are clearly written down and accessible to your family or executor.
• Common mistake: Assuming your family knows your preferences or leaving them to guess, which can lead to decisions that don’t align with your desires.

9. Review Power of Attorney and Healthcare Directives: Ensure you have a durable power of attorney for financial matters and an advance healthcare directive (living will) in place, should you become incapacitated.

• What “good” looks like: These legal documents are current, clearly state your wishes, and have been properly executed.
• Common mistake: Not having these documents or having outdated ones, leading to family disputes or unwanted medical decisions.

10. Secure Important Documents: Store your will, financial records, and other critical documents in a safe, accessible place. This could be a fireproof safe, a safe deposit box, or with your attorney.

• What “good” looks like: Documents are protected from damage or loss and can be retrieved by your designated executor.
• Common mistake: Leaving vital documents in easily accessible but insecure locations, like a desk drawer.

Common mistakes (and what happens if you ignore them)

Mistake	What it causes	Fix
Not having a will	State laws dictate asset distribution, which may not match your wishes.	Consult an attorney to draft a legally valid will that reflects your desires.
Outdated will	Previous wishes might no longer be relevant; can lead to family disputes.	Review your will every 3-5 years or after major life events and update it as needed.
Forgetting to update beneficiaries	Assets go to unintended individuals, bypassing your will’s instructions.	Regularly check and update beneficiary designations on all accounts (retirement, life insurance, etc.).
Neglecting digital assets	Accounts become inaccessible, lost, or misused; can cause privacy issues.	Create an inventory of digital accounts and instructions for their management.
Storing important documents insecurely	Documents can be lost, destroyed, or accessed by unauthorized individuals.	Use a fireproof safe, safe deposit box, or entrust them to your attorney. Ensure your executor knows where they are.
Not informing your executor	Executor is unaware of their role or the location of critical information.	Have a clear conversation with your executor, providing them with necessary details and document locations.
Overlooking joint accounts	Assets in joint accounts may pass directly to the survivor, regardless of a will.	Understand how joint ownership affects asset distribution and ensure it aligns with your overall estate plan.
Not considering funeral wishes	Family may incur unexpected costs or make decisions that don’t align with your desires.	Document your preferences for services and burial/cremation, and inform your executor or close family.
Failing to review insurance policies	Insufficient coverage can leave dependents financially vulnerable.	Periodically review your life and other insurance policies to ensure adequate coverage for your current situation.
Ignoring powers of attorney and healthcare directives	If incapacitated, decisions may be made by others without your input.	Ensure these documents are up-to-date and accessible, naming trusted individuals to act on your behalf.

Decision rules (simple if/then)

• If you have dependents under 18, then create a will immediately because it’s crucial to designate guardians for them.
• If you have significant assets, then consult an estate planning attorney because they can help minimize estate taxes and ensure efficient distribution.
• If you have beneficiaries on retirement accounts, then review those designations first because they usually supersede your will for those specific assets.
• If you have significant debt, then ensure your executor has a clear understanding of your liabilities to manage them properly.
• If you’ve recently married or divorced, then update your will and beneficiary designations because these life events often change your intentions.
• If you want to control who inherits specific items, then list them clearly in your will or a separate letter of instruction.
• If you have digital assets like cryptocurrency or online businesses, then create a plan for their transfer or liquidation because they require specific handling.
• If you have specific wishes for your funeral or memorial, then write them down and inform your executor because this prevents family stress during a difficult time.
• If you have joint bank accounts, then confirm with your bank how these assets will be handled upon your death because it can vary by account type.
• If you have multiple properties, then ensure your will or deeds clearly state how they should be managed or transferred.
• If you want to ensure your medical wishes are followed, then have an advance healthcare directive in place because it provides legal guidance.
• If you have a complex family situation (e.g., blended families), then seek legal counsel to ensure your will is clear and avoids potential disputes.

FAQ

Q: How often should I review my will?

A: It’s generally recommended to review your will every 3-5 years or after significant life events like marriage, divorce, the birth of a child, or the death of a beneficiary.

Q: What happens if I don’t have a will?

A: If you die without a will (intestate), state laws will determine how your assets are distributed. This process can be lengthy, costly, and may not align with your wishes.

Q: Who should I name as my executor?

A: Choose someone you trust implicitly, who is organized, responsible, and capable of handling financial and legal matters. They should also be willing to take on the role.

Q: Do beneficiary designations on retirement accounts need to be updated with my will?

A: Beneficiary designations on retirement accounts (like 401(k)s and IRAs) typically override your will for those specific assets. It’s crucial to ensure they are consistent with your overall estate plan.

Q: What are digital assets?

A: Digital assets include things like email accounts, social media profiles, online photos, cryptocurrency, digital subscriptions, and any other data stored online or on digital devices.

Q: How can I ensure my digital assets are handled correctly?

A: Create an inventory of your digital accounts and provide clear instructions on whether they should be closed, memorialized, or transferred to a specific person. Consider using a digital legacy service or a secure document.

Q: Is a safe deposit box a good place to store my will?

A: It can be, but it has drawbacks. A safe deposit box may be sealed upon your death, making it inaccessible until a court order is obtained. Storing it with your attorney or in a fireproof home safe might be more practical.

Q: What is an advance healthcare directive?

A: This is a legal document that outlines your wishes for medical treatment if you become unable to communicate them yourself. It often includes a living will and a healthcare power of attorney.

Q: How do I ensure my debts are paid from my estate?

A: Your executor is responsible for identifying and paying your debts from the estate’s assets before distributing any remaining inheritance to beneficiaries.

What this page does NOT cover (and where to go next)

• Specific legal advice for your state: Laws regarding wills, trusts, and estate planning vary significantly by state. Consult with a qualified attorney in your jurisdiction for personalized guidance.
• Tax implications of estate planning: While this guide touches on financial organization, complex estate tax laws require specialized knowledge. Seek advice from a tax professional or estate attorney.
• Investment strategies for wealth preservation: This article focuses on organizing existing assets. Developing investment strategies to grow or preserve wealth over time is a separate, ongoing financial planning task.
• Choosing specific insurance products: While reviewing insurance is mentioned, selecting the right types and amounts of life insurance, for example, is a detailed process best done with an insurance advisor.
• Long-term care planning: Decisions about long-term care, such as nursing home costs or in-home care, involve separate financial and medical considerations.