According to the Census Bureau, more than two million Americans die each year. Often, the survivors are left to deal with the departed loved one’s death, taxes and estate management without any advance preparation. In one day, we can literally go from waking up with a loved one, to planning their funeral and sorting out their finances. I know this first-hand.

Just days before her birthday two years ago, my wife Joanne died suddenly of congenital heart disease. Beyond the grief, I was also faced with a growing mountain of financial decisions. Being a Certified Financial Planner, you would think that such decisions would be relatively quick and easy for me. But, as I found out, my emotions left me little room for my normally logical and practical thinking.

With any business, including the “business of living,” preparation is key to successful implementation. We get so busy “doing life,” we typically spend little or no time preparing for what happens after it. With the loss of my own wife at a young age, I learned that in sorting out the finances of a recently-departed loved one, unprepared survivors can make costly mistakes that may deepen their grief and widen their losses at a most vulnerable time in their lives.

Here are my 10 proven strategies to prepare for your transition.

Draft or modify your will.
If you die without a properly executed Will, the distribution of your assets will be decided by a Probate Court. Make sure you have a Will and see that it is updated about every three years.

Draft a Health Care Proxy and Durable Power of Attorney.
In a Health Care Proxy, you designate somebody to carry out your wishes for health care or life-prolonging procedures when you are not able to do so, such as when you are unconscious. A Durable Power of Attorney does the same for financial decisions.

Pre-arrange your funeral.
Recently, I attended a pre-planned funeral. Not only had this dear friend purchased his casket and burial plot, he also picked the person to deliver the eulogy and specified the songs, poems and readings for the service. To paraphrase the Frank Sinatra song, he did it his way, lifting the responsibility from his survivors and conserving the money of his estate.

Name beneficiaries of your assets.
Name beneficiaries of your insurance policies and financial accounts, including bank accounts, IRAs and employer-sponsored plans. For non-retirement accounts, this may be done through a Transfer on Death (TOD) or Payable on Death (POD) clause. Additionally, a Living Trust will allow you to include hard assets such as your house. The huge advantage of doing this is that at death, your assets will pass to your designated beneficiaries without needing to go through probate, saving time and attorney’s fees.

Create jointly-held accounts.
Assets in accounts that are held jointly by two or more persons transfer quickly and easily to the surviving account holders. If you’re planning to give your cash assets to a particular person or persons, consider simply adding that person or those persons as joint tenants of the account. Make sure, though, that this does not contradict any other post-mortem planning.

Create an Estate Plan.
Consult an estate planning attorney or Certified Financial Planner to determine how much property you own and whether it is potentially subject to federal estate tax or state inheritance tax. Proper estate planning will allow you to minimize taxes and maximize family wealth.

Organ donation.
Organ donation is often overlooked or an intention that is never acted upon. Over the last several years, organ donation has been increasing primarily due to “living donations,” e.g., life-saving transplants. In 2002, living donors, out-numbered non-living donors for the first time. If you decide to participate in this selfless act, be sure to designate “donor” on your driver’s license and notify your attorney or other designated person in writing.

Prepare instructions.
Prepare a letter of instructions for your executor, trustee and beneficiaries, informing them of your wishes and telling them the location of your will and other important documents. If your documents are kept in a safe, make sure to inform the appropriate people of the combination and location of the safe. Never place your will or other critical documents in a bank safe deposit box, as banks often refuse access to these boxes upon notification of death.

Create a financial diary.
Create a comprehensive listing of all of your financial data. This endeavor will save your survivors many hours of tedious and frustrating work when you are not there to ask. Your diary should include the following:

  • People to be notified. List each person’s name and contact information, e.g., address, phone number, e-mail, and a brief description of your relationship to this person. Don’t forget work supervisor, insurance agents, attorney, accountant, doctors and clergy.
  • Personal history. Include date of birth, location of birth certificate, social security number, military service and information regarding previous marriages.
  • Work history. Along with dates of employment, list contributions to work-related funds, health insurance providers, etc.
  • Financial accounts. List bank and investment accounts, including account numbers, location and phone number of regularly visited branches, branch manager’s name, location of safe deposit box and keys, etc. List all credit cards, with issuing institution, card number and credit limit. Provide instructions as to how to find your passwords or PIN numbers.
  • Medical, life, disability and homeowner’s insurance. List insurance providers and account numbers, along with coverage information and the location of these policies.
  • Tax returns. Provide instructions as to where copies are located and the preparer’s information.
  • Living wills or health care proxies. Make sure copies are easily accessible by appropriate doctors or other caretakers.
  • Assets. Include residential and commercial real property, and personal property, such as vehicles and boats (and related insurance information), trust funds, business ventures, debtors and collectables, with their value as of that date.
  • Special final requests. Include those things that you may have deemed too insignificant or too private to include in your will.

Organize your important papers.
Key to all of these strategies is to let your survivors know where to find your important papers and files. This will ensure a more smooth and accurate settlement of your estate.

As the elder statesman Benjamin Franklin stated, “the only two inevitable things in life are death and taxes.” What is not inevitable is how you prepare for either. Undoubtedly, this year, like last year and the year before, your accountant has spent hours preparing your taxes. The question arises, how much time have you spent planning for the other inevitability?

By Mark Colgan


  • Mark Colgan is the author of the book, "The Survivor Assistance Handbook: A Guide for Financial Transition" and a vice president with McDonald Financial Group, a KeyCorp company, in Rochester, N.Y. Colgan donates a portion of the proceeds from every book sold to the Pediatric Cardiology Center of Strong Memorial Hospital in Rochester, in memory of his late wife Joanne Colgan.