How Estate Planning Can Reduce The High Cost Of Dying — Part 2
DEALING WITH DEATH: A SHIFTING PERSPECTIVE
Despite being a universal experience as natural as birth, many of us are unprepared for the complexities of death—whether our own or that of a loved one. The COVID-19 pandemic has starkly underscored this reality, causing a nearly 20% spike in the U.S. death rate from 2019 to 2020, the highest increase in a century. With over a million lives lost in the aftermath, death has never been more pervasive and undeniable.
However, amidst this sobering backdrop, there's a growing recognition within the end-of-life industry that the pandemic may catalyze a transformative shift in how we approach death, grief, and the associated challenges. This sentiment is at the core of Empathy, a new startup utilizing AI to assist families in navigating the logistical and emotional aftermath following the loss of a loved one.
Ron Gura, CEO and co-founder of Empathy, emphasizes this perspective in a recent company report, reflecting on how the pandemic has compelled a reconsideration of our collective approach to death:
"For many, COVID-19 has been a stark reminder of the omnipresence of death and loss," notes Gura. "Yet, it also presents an opportunity to change public perception, bringing a topic historically shrouded in shadow into the light. By openly confronting it, we can better understand how to support those bearing its burdens."
When death occurs, those left behind confront significant challenges—emotional, logistical, and financial. Empathy aims to alleviate these burdens through its AI-driven platform, complemented by its inaugural Cost of Dying Report released in March 2022. Based on a survey of over 2,000 Americans who lost a loved one in the past five years, the report sheds light on the true financial toll of death on families.
In the previous installment of this series, we highlighted key findings from the Cost of Dying Report and discussed how proactive estate planning can mitigate the financial, logistical, and emotional strain on your family following your passing. In this concluding part, we delve deeper into the report's insights and explore additional strategies for lightening the load on your loved ones.
THE TIME INVESTMENT
According to the report, families spend an average of 420 hours over 13 months to settle an estate after a loved one's death. However, this timeframe extends to 20 months for estates requiring probate. Notably, a majority of respondents underestimated the duration of these tasks, with 54% reporting longer-than-expected timelines, and 31% indicating significantly prolonged periods.
The tasks consuming the most time, as reported by respondents, include:
Arranging the funeral: 55%
Managing financial affairs: 47%
Addressing the will and probate process: 45%
Settling bills, debts, and taxes: 41%
Handling property matters: 25%
Identifying service providers: 23%
MITIGATING TIME BURDENS
Effective estate planning can substantially reduce the time your family spends on these tasks. Preplanning and prepayment of funeral arrangements can notably alleviate what many families find to be the most time-consuming responsibility. Moreover, strategies like avoiding probate through a revocable living trust can eliminate additional time and complexity associated with estate settlement. Another critical aspect often overlooked is ensuring a comprehensive inventory of your assets is regularly updated throughout your lifetime, which can prevent oversight and delays in accessing your wealth.
The importance of maintaining an updated asset inventory cannot be overstated. It is estimated that over $58 billion in assets remain unclaimed across state and federal agencies due to inadequate documentation or oversight.
THE MENTAL AND PHYSICAL TOLL
Navigating the myriad responsibilities following a loved one's death can be overwhelming and emotionally taxing. Many respondents, particularly those under 45, expressed feeling unprepared and lost during this period. Estates burdened with debt compounded stress, with lower-income families disproportionately affected.
The stress and uncertainty inherent in this process can manifest in various clinical symptoms, including:
Stress headaches: 30%
Fatigue due to stress: 42%
Panic attacks: 17.5%
Memory impairment: 16%
COMMUNICATION AS A BUFFER
The reluctance in society to openly discuss death exacerbates these challenges, making an already difficult time even more daunting. According to Empathy's Compassion Advisor, Dr. BJ Miller, addressing this communication gap is crucial:
"Bereavement exacts a heavy toll, both emotionally and physically. By normalizing conversations around death and providing guidance, we can significantly ease the burden on those grieving."
Don't leave your family in the dark. By engaging in open dialogue and comprehensive planning, you can ensure your loved ones are well-prepared and supported in the event of your death. Establishing these conversations early and involving your family in the planning process fosters clarity and peace of mind, knowing they understand your wishes and are equipped to navigate the aftermath.
CONCLUSION
As the pandemic has underscored, death is an inevitable part of life that can strike unexpectedly. Planning for this eventuality not only relieves your family of logistical and financial burdens but also allows you to live your life more fully today. Many clients report a profound sense of relief after taking proactive steps toward estate planning—a process that transcends mere asset distribution to encompass your life's legacy and the well-being of those you cherish.
Embrace the opportunity to shape your legacy and lighten the load on your loved ones. By initiating these conversations and planning effectively, you can ensure your family's future security and harmony. If you're ready to take this important step, connect with us to begin your journey toward comprehensive planning.
This article is a service of Zarda Law, S.C. We do not just draft documents; we ensure you make informed decisions about life and death, for yourself and the people you love. That's why we offer a Legacy Planning Session, during which you will get financially organized and make all the best choices for the people you love. You can begin by scheduling a Legacy Planning Session and mention this article to find out how to get this $750 session at no charge.
