My company recently did a survey with Quest Research Group in the wake of Covid-19 to find out how prepared people were if something were to happen to them. We asked 1,000 people how much planning they’d done in the past and if the pandemic motivated them to start planning now.
We found that Covid-19 had a significant impact on people's sense of personal readiness, with 65% saying that coronavirus made them realize the importance of sharing important information with family. Around the same amount of people (64%) noted that planning for the future was more important than ever and half (50%) said the pandemic made them realize how unprepared they were for a serious emergency.
With the crazy amount of uncertainty in the world, this research shows that people are taking action, but having spent almost a decade helping people get a plan in place I know it’s something people typically tend to avoid. Why do people avoid it? I’ve narrowed it down to these three most common excuses:
Too Busy: I can barely keep up with my life as it is.
Too Adult: It’s complicated and/or expensive.
Too Superstitious: I don’t want to jinx my life by thinking about death.
All of these excuses are followed by something like “I know it’s something I should do” and “I’ll get around to it one day.” The bottom line is, it just doesn’t feel urgent.
Let’s start with people who are superstitious and believe doing this somehow jinxes their life. An example I’ve used for years to combat this type of thinking is to mention why people buy car seats for their kids. I’ve never met a parent who refused to buy a car seat because they thought it would make them more susceptible to an accident. You buy one because you’re being a responsible adult.
The other two excuses are similar in nature because when people think planning is a time consuming or expensive endeavor, they’re automatically too busy or frugal to even consider taking on such a task and we do everything we can to procrastinate.
To dispel these excuses I’ve come up with four things you can do right now, for minimal to almost no cost, that can help your family in the event of an emergency and make you feel more responsible for your life the same way parents do when buying car seats.
1. Share Passwords
Passwords are the keys to all your information, and they’re also the modern keys to estate planning. Long gone are the days where everything is on paper. To gain access to your accounts, services, and contacts in the event of an emergency someone you trust needs access to your passwords. It’s fine if you don’t want to share them today for personal or security reasons. But you do need to get them organized in one easy to manage place — I suggest a password manager like Dashlane or LastPass, which handles all your passwords and you only have to remember one — and then make arrangements for it to be shared at some later point. It could be as simple as writing down the location, or the master password, and keeping it with your important papers. Plus, if you ever forget the master password, which happens, you’ll know where to find it.
2. Medical Directive
Let your family know what you want to be done in the event of a medical emergency (Living Will) and who should speak for you if you’re unable to communicate (Health Care Proxy). This is called an Advance Directive, they’re free. While it can be a stressful thing to consider, it’d be terrible to do nothing and force your family to make these decisions on your behalf during a medical crisis.
3. Financial Aggregation
What money do you have and what money do you owe? When a person is incapacitated or dies their assets have to be located or made accessible and debts need to be paid. It shouldn’t be a treasure hunt for your grieving family. Anything that has value (bank/investment accounts, property, assets, benefits) and anything that needs to be paid (mortgage, loans, recurring bills, insurance policies) should be in one place to prevent unnecessary penalty fees or interruption in service (like the car being repossessed).
Along the lines of a password manager, you should use an aggregation site or service (Mint, Clarity Money, Trim, Quicken) to compile everything in one place, to help you manage your finances today and allow your family to know where everything is later. Plus, if you include the login details in your password manager it makes things even easier for them (and you) to gain access when it’s needed.
4. Create A Will & Power of Attorney
This is the part that usually stops people in their tracks. Legal documents can be confusing (and overwhelming) to read, but the purpose of these documents is pretty simple. A Will makes sure your assets get to the right people, and that any underage children or special needs dependents are cared for by the right people. A Power of Attorney (POA) is like a Health Care Proxy for your money: It allows a person to make financial and legal decisions on your behalf when you can’t.
Ideally, you’d create these with an estate attorney to avoid any issues down the road. But I want you to avoid putting them off so if dealing with an attorney is too big of a lift right now create them online. Most people don’t have complicated estates so give it a whirl to make sure you leave behind something.
If you’re feeling especially daring, look into creating a Trust to protect those assets, but to avoid getting off track, focus on getting a Will and POA first.
No More Excuses
These four things should take you around two hours, maybe three if you really take your time. Not for each item, but for all of them combined. If you think it sounds crazy, give it a try. You don’t have to be a completist. For passwords and financials, focus on the most valuable accounts. For your Advance Directive, simply fill it out and name a Proxy. It takes around 30 minutes for you to do a Will and POA online.
Once you get all these basics and realize it’s not as hard as you thought it was, you can start to add more details, more accounts, and maybe even take your legal documents to an estate attorney to add customization. The point is to start somewhere, and now you know where.