Unresolved finances can refer to any type of assets you have that you have not made plans for should you pass away or become unable to manage them yourself. Things like unpaid debts, insurance policies, and investments should be properly set up so there is no question about what should happen.
The first thing every adult needs is a will, which is a legal document that specifies who you designate your property to after you pass away. Experts say that more than half of all Americans do not have a will. Things like your home, cars, jewelry, and family heirlooms can all be listed here. The requirements to make a will legal can vary based on where you live, but in many states, you do not need a lawyer; you can go through the process of creating a will by yourself.
How you list items in your will can vary based on whether you are single or married. Married couples are often dealing with shared property, like a home or vehicles that were purchased during the marriage with shared resources. If your spouse survives you, your ownership of the property is automatically transferred to them, and you cant designate it to anyone else in the will.
As a married person, you can still have a property that belongs to just you. This would include any assets listed in a pre-nuptial agreement, an inheritance that was left to only you by a family member, and any money that you may have been awarded as the result of a personal injury lawsuit. These items are considered your property, so if you’d like to leave them to your spouse, you can specify that in your will.
Your family home may be part of what you want to leave to your children and future generations. For this to happen, not only does your will need to detail who you’d like to leave the home to, but the property has to belong to you as well. According to industry statistics gathered in January 2019, households across the United States owed a cumulative amount of mortgage debt totaling $9.12 trillion. If you are one of the people who has used a mortgage to get into a home and hasn’t finished paying it off, your loved ones will be faced with a difficult choice.
If there is a mortgage on the property when you pass away and you leave the property to someone else in your will, your loved one may have to consider selling it to pay off the amount outstanding on the mortgage. If your loved one wants to keep the home, options like selling other assets, using the proceeds of a life insurance policy, or getting a mortgage in their name are popular avenues.
Life Insurance Policies
The proceeds of a life insurance policy can be designated to anyone you like. For example, if you are leaving your home to your child, and you know the property has a mortgage on it, you can also direct the life insurance policy to be paid out to your child so they can pay off the amount of the mortgage and keep the property. To ensure the money is paid out quickly, you can specify this in your will as well as in the insurance policy documents. This confirms what you want to be done with the money.
With the right documents in place, you can ensure that your assets go to the people you care about without delays or prolonged court proceedings that can deplete the resources you have worked hard to accumulate.