Chapter 10. Estate Planning
It's hard to imagine, but it's true—one day you'll be gone. There are two major financial areas that should be addressed before your death: replacing your financial contribution to the family (through insurance) and your will. Specifics will vary depending on where you live, so be sure to consult the appropriate professional for guidance in these areas. We provide a general guide for you so you can begin to think about how you'd like to structure things.
After you're gone, your spouse, children, and the charities you support will miss your financial contribution (oh, and you too, of course). One of the first steps you should take is to estimate how much they'll miss that contribution. Alter your financial plan by changing your date of death to tomorrow. At this point your income will stop, and there will be a tax bill due. You'll see that the family net worth picture rapidly changes—usually for the worse. However, people who have adequate insurance often will see little or no change to the family wealth. If you are concerned that you're underinsured, try running some different scenarios through the financial plan until you find a level of coverage that you're comfortable with.
If you're not working with a financial plan (although, as you already know, we recommend you do) you can quickly go online and search "insurance calculator." You'll find numerous sites that will walk you through a calculation for the amount of insurance you require. ...