There has been speculation since death of pop star Whitney Houston on February 11th about the value of her estate.  What’s  certain, however, is that shortly before her death she had won a lawsuit against her stepmother to receive a  $1 million insurance policy left to her by her father.  Since Houston’s will designates her daughter, Bobbi Kristina, as the primary heir, unless Houston had  time to set up a trust for Bobbi Kristina, the 18-year-old will inherit the money outright.

If you have ever known an 18-year-old, it isn’t too difficult to imagine how disastrous it could be to suddenly dump so much money on him or her.  This is why setting up an inheritance with trusts can be so valuable.  This way, the money can be managed by someone more mature until the heir is more prepared to deal with the responsibilities and complexities of a such a large sum.

The irony is that those who most need to execute this kind of planning (the very wealthy) are often the least likely to do it because it can be such a complex and time-consuming process.  Whether you’re wealthy or not, though, the lesson in all of this is simply awareness – it’s crucial to look ahead to anticipate the financial impact of our death on loved ones, especially our children, and make provisions to cushion that impact as much as possible.

Make no mistake – receiving a large amount of money all at once is as much a burden as a gift, especially for those with little financial education.  And unfortunately, that’s not just the 18-year-olds, but most of us.

A few weeks ago, I mentioned that windfalls can have a negative effect on people’s lives.   What I said there applies to tax refunds too; even though they may be small compared to things like an inheritance, there is always the danger of blowing through it before you even know where it’s going.

That’s why, the most important thing you can do is PLAN what you’re going to do with the money.  If you use a tool like Mint, you can enter the amount you will receive as income, and add categories to your budget for any non-regular items you wish to spend it on.  But whether you’re doing it online, with an Excel spreadsheet, or on paper, you need to actually record your plans for every cent of that refund.

Once you know how much you’ll be receiving, you can start the process by brainstorming all the needs and wants you might put the refund toward.  Then narrow down the list to fit the budget.  Start with savings and debts.  Financial blogger Sarah Gilbert, at the website Get Rich Slowly, recommends that you choose at least one debt to pay down and plan to put a third of the  refund into a savings account.  She also cautions against spending the money before you get it, whether it be with credit cards or putting down a deposit the day you expect the refund to arrive.

However, Gilbert also flies in the face of the conventional wisdom that says you should only spend 1% of your refund on splurges.  “After all,” she says, “it’s only a tax refund.”  So go ahead and live a little, but make sure you don’t go over that 5%, which will of course be much easier if you keep excellent track of both your budget and every cent you spend.  The reward for this discipline will be that when you do splurge within the budget you’ve set, you’ll be able to fully enjoy your indulgence without any guilt or worry whatsoever.

According to Wikipedia, an affidavit is a formal sworn statement of fact, signed by the declarant (who is called the affiant or deponent) and witnessed (as to the veracity of the affiant’s signature) by a taker of oaths, such as a notary public.

Say what?  Let’s put that in English, shall we?  Basically, an affidavit is a legal statement of facts related to some event.  There are many different kinds related to issues as diverse as immigration, marriage, heirship, lost documents and much more.

If you’re faced with having to write an affidavit, it can be daunting for a number of reasons.  Not only do you need to write a strong and succinct statement of the facts and nothing but the facts, but you need to do it using legal lingo.  You will also need  to get the affidavit notarized.  You can, of course, hire a lawyer to help you with this, but if you decide to do it on your own, there are some good resources out there.

At Microsoft.com you can download a free Word template to get you started.  There are several other websites that offer free affidavit templates, but many of them require you to register for an account, so doing it through Microsoft is the most straightforward and simple way.

After you’ve downloaded and opened the template in Word, I recommend that next you visit rfptemplates.technologyevaluation.com, which provides an extremely helpful walk-through of the affidavit writing process, section by section.  These instructions are for a general affidavit, but the site also provides helpful links for more specific types of affidavits.

Here are a few tips to keep in mind:

• Keep the tone of your writing formal and authoritative.
• Avoid embellishing your story in any way.  Keep it absolutely factual and directly relevant to the purpose of the affidavit.  Avoid emotional language.
• Take your time.  Write several drafts and edit, edit, edit!  Write your first draft then leave it for a day or two so you can come back to it with fresh eyes.
• Edit for clarity.  This  means cutting out as many unnecessary words as possible.  Look at every single sentence with a critical eye; ask yourself, “Is this sentence necessary, and if so, could I say it with fewer words?”
• Read it out loud to yourself; this is a great way to recognize any changes that might still need to be made.
• When you feel you have a “final draft,” have someone else look over it.  They may catch something you’ve missed.
• Be sure to get it notarized.
• Once it’s notarized, make copies and keep copies.  If you’re using Life at Hand®, put a copy in your Organizer.  It’s also a good idea to scan the original to save electronically.

I can’t emphasize enough how important it is to take your time when writing an affidavit, or any other important document, for that matter.  Affidavits often relate to a situation you may have strong emotion around, so it’s essential to evaluate your draft from as detached a place as possible, and this usually means revisiting it several times.  It’s okay to write a passionate first draft, but then it’s crucial to edit out the emotion and just leave the facts.

When planning a wedding, with so many details to focus on it can be easy to overlook planning for what happens AFTER the wedding.  Many people don’t spend much time considering the ins and outs of combining households with their new spouse.

But they should, because no matter how big and complex the wedding is, joining two lives in terms of money, housing, and other aspects is bigger and more complex.  And for older couples, even moreso.  As Lisa Scherzer at SmartMoney.com puts it:

Marriage at any age means a marriage of finances. But the fact that older folks are likely coming into a second or third marriage with adult children, assets, a house, a 401(k) and perhaps failing health makes a trip to the altar significantly more complicated.

It’s common knowledge these days that money battles are a major contributor to divorce, so it’s crucial to get those financial ducks in a row before you’re standing at the altar.  According to the New York Times article, Money Fights Predict Divorce Rates, couples who disagree over finances once a week are more than 30 percent likely to divorce than couples who only have financial disagreements a few times a month.

As uncomfortable and mundane as it might be, it’s important to discuss with your intended ahead of time all the many things that combining households will mean.  And it’s best to do this through a series of conversations rather than trying to sit down and get it all done at once.

Ron Lieber of the New York Times has written an  excellent article called Money Talks to Have Before Marriage, in which he categorizes the major topics a couple should address.  Another great resource for conversation starters from Estate Planning Answers can be found here.  This article provides helpful questions to consider together, including issues related to investing, wills and trusts, and savings and retirement.

For young couples, it may seem premature to talk about things like estate planning and retirement before marrying, but making decisions together now will only strengthen your chances of having a happy marriage in the long run.  After all, you’re planning on spending the rest of your lives together, so it only makes sense to plan for the “old and gray” years.

If you are a regular reader of this  blog, it may seem to you that I talk too much about death around here.  My goal in doing so, however, is not to be morbid but to help to break the silence around this taboo topic, because frankly, if we don’t become more open and embracing of death in our culture, the misery and tragedy of estate battles will continue to be the unfortunate norm that it is.

It almost seems superstitious, the way we tend to avoid thinking or talking about death.  It’s as if we’re afraid that by thinking about death, we will be inviting it to happen!  But the truth is, it IS going to happen, and could happen at any time, so in that sense, doesn’t it actually make sense to give this reality some attention?

I designed Life at Hand® as a tool to help people plan and document their estates, but the difficulty I face is that people won’t pick up the tool unless they’re willing to face the uncomfortable truth of their own eventual death.  So today I want to once again make the plea to take the first step in estate planning:  let the reality of death enter your consciousness.  Think about it, do research, explore your feelings about it.

Believe me, I know this isn’t easy at first, but there are some wonderful resources that can help you get started, like this two-part article, The Last Taboo.  You may be pleasantly surprised to find that once you’ve entered the process of embracing and planning for your own death, that it’s not only not as bad as you thought it would be, but is actually life-enhancing in the present!  Why?  Because when you’re aware of and embrace the fact that your time here will one day end, you become more present to and grateful for the life you have right now.

After the messiness of the holidays, after the tree has been taken down and the decorations put away, it’s a natural urge to thoroughly clean the house and get things more organized.  Creating freshness and order in a living space can be an incredibly energizing and inspiring thing to do.  We never realize how much clutter can weigh us down until we clear it out.

If you’re noticing an excess of clutter in your home right now and feel a bit overwhelmed about how to tackle it, take heart – the hardest part is just getting started.  The trick is to create momentum, and to do that you just have to jump in somewhere.  According to simplicity blogger and author, Leo Babauta, in his article How to Tackle Your Clutter, there are two main ways to do this.  The first he calls “The Surge,” and this involves setting aside a period of time like a weekend devoted to decluttering as much as possible.  The other method he calls “Chunking,” which means picking one relatively small space at a time to declutter.

No matter which method you choose, once you get going with it you’ll start feeling lighter right away.  It may not seem like simply decluttering your home could be a transformative life event, but it really can.  It comes down to that momentum.  According to minimalist blogger Courtney Carver, in her article, How to Make Decluttering Fun, decluttering her house motivated her to then work on becoming debt-free, which in turn led her to quit her job and start her own consulting business.

And if you’ve been avoiding getting your vital documents in order, start by de-cluttering your house and you just may find the motivation that’s been eluding you.

Imagine you (or your child or grandchild) decided to get married – tomorrow.  What kind of a wedding would that be?  With no time to plan, not only would it be haphazard and spare at best, but it would cause A LOT of stress for you and any others involved.

This may sound like a ludicrous scenario, but it’s analogous to what happens with most people’s funerals.  According to AARP, a whopping 79% of people age 50+ have not even begun to comparison shop for funerals or burials.  People die with few or no instructions for how to carry out their funerals, and then those who are grieving are left to handle all the details for a life event that is no less significant than a wedding.

What this says to me is that people are so afraid to face their own mortality that they will burden their loved ones in the most unkind way possible upon their death.

But lest I’m doing too much finger-wagging here, let me admit that I don’t normally enjoy thinking about my own death any more than anyone else.  Until today, that is – when I discovered My Wonderful Life, a website devoted to planning one’s own funeral.  According to founders Sue Kruskopf and Nancy Bush, “We started MyWonderfulLife.com because we feel that a person’s funeral should be a reflection of their life; unique, personal and meaningful.”

By registering for a free account, you can create a funeral plan online and then email a link to those who will carry out your wishes.  The beautiful thing  about this site is that it actually makes you want to design your funeral and burial.  It infectiously conveys the sense that a funeral is a celebration of a life.

Even – or perhaps especially- if you still haven’t started your estate plan, check out My Wonderful Life.  I’ll wager that a few minutes exploring this site will bring out enthusiasm for funerals you never thought you could experience.  And it will motivate you to begin the important process of planning how to lessen the negative impact of your death on the people you love most.

Last week I mentioned the 2012 Ready Campaign, and suggested items that could be gifted to help a loved one put together an emergency kit.  This week, with the New Year fast approaching, I’d like to suggest that you consider making a very important New Year’s Resolution, with the assistance of Ready.gov.

The Ready Campaign’s purpose is to make an emergency preparedness resolution easy to keep by providing the tools and resources needed to take the four important steps:

1.  learn your risks

2.  make a plan

3.  build a kit

4.  get involved.

Preparing ahead of time for things like flooding, winter storms, wildfires and earthquakes can help to save lives, protect property, and can speed up the pace of recovery.

You can create or update your own emergency preparedness plan using Ready.gov’s easy template.   Other free preparedness resources, like an Emergency Supply Kit Checklist are just a click away at and can be found at Ready.gov, or in Spanish at Listo.gov.

Emergencies will happen, but taking action now can help us all to minimize the impact they will have on our lives. Preparedness is contagious. What starts with one family can spread throughout a neighborhood, and every prepared community frees up emergency responders to take care of those who
are in dire need. Preparedness is a shared responsibility and everyone has a role. So take the time and Resolve to be Ready in 2012.

Ready.gov’s 2012 campaign, Resolve to be Ready, is now in full swing.  I’ll be talking more about this next week, but what I want to do today is suggest that if you’re still working on your holiday shopping, you might consider giving loved ones, especially any seniors in your life, the gift of preparedness.

The Basic Disaster Supplies Kit that Ready.gov urges people to put together includes several items that would make excellent gifts.  Some suggestions follow, with helpful shopping links:

•  The  Stansport 01-517 Hand Crank or Solar Battery Radio and Flashlight  is a great choice because it provides both a radio and a flashlight, both crucial emergency items.
• NOAA Weather Radio with tone alert
• First aid kit
• Whistle to signal for help
• Manual can opener for food
• Cell phone with solar charger (just make sure you choose one that works with the phone)
• Be sure to include extra batteries for items that require them!

So if you’re still searching for gifts and stocking stuffers, instead of trinkets why not give your loved ones things that could save their lives?

Last week, I introduced the concept of writing an ethical will as a way to communicate the intangibles you’d like to leave your heirs.  One of the reasons I mentioned for doing so is to explain why you are dividing your assets a certain way.  I’d like to talk more about that today.

I read a sobering article recently about the negative and even tragic effects of windfalls on people’s lives.  You can read the full article here, but the gist of it is that most people, when they receive a large sum of money, not only blow through it very quickly, but end up in worse  circumstances than before they received the windfall.

It’s wise to consider this fact when creating your estate plan, and add conditions to your gifts such as requiring the recipient to make contributions to a specific charitable organization, or maintain a steady job.  You can also set up your gifts in trusts and choose stable, reliable people or institutions to administer them.

Then, in your ethical will, you can explain to your heirs exactly why you have set things up the way you have.  If you write letters to each heir communicating personally and lovingly what your intentions are for both the gift and the recipient, in a very real way you could prevent tragic circumstances from occurring down the road, once you’re not around to do anything about it.