Getting Your Affairs in Order: What To Do Before It’s Too Late in 7 Steps

Let’s be honest: talking about death is uncomfortable. But not talking about it? That can leave your family emotionally overwhelmed and financially drained. Organizing finances before your death helps ensure your loved ones are secured, cared for, and understand the plan.

Why Getting Your Affairs in Order for Death Matters

No one wants their final legacy to be a tangle of unpaid credit cards, locked financial accounts, and costly court battles. Unfortunately, without thoughtful financial strategy, that's often the outcome. Here are key reasons why planning ahead is a great idea:

• It helps avoid unnecessary estate taxes and legal hold ups, such as probate court proceedings, frozen financial accounts, and disputes over asset distribution.
• Planning helps shield your family from financial strain like funeral costs, unpaid credit cards, mortgage management, and delays in accessing life insurance or retirement funds.
• Makes it easy for your loved ones to quickly access funds and assets, like life insurance payouts, bank accounts, and retirement savings, without delays or confusion.
• It ensures that your wishes are honored without any fuss by clearly laying them out in legal documents such as a will, power of attorney, and updated beneficiary choices.

In short, financial preparation isn’t just about money; it’s about offering your family clarity and easing future stress.

From updating life insurance to organizing power of attorney documents and settling debts, preparing your finances is one of the most generous acts you can do.

Steps to Get Your Affairs in Order

Step 1: Get Your Legal House in Order

Create or Update Your Estate Plan

Your estate plan is the blueprint for what happens to your assets. If you don’t have one, the state will decide for you, and that can get messy.

An estate plan typically includes:

• A last will and testament
• Powers of attorney
• A living will or healthcare directive
• Trusts, if applicable
• Distinct beneficiary designations

Appoint Powers of Attorney

Without a designated power of attorney, your family could be forced to seek guardianship in court if you become incapacitated. It is best to designate both a:

• A durable financial power of attorney for managing money
• A healthcare power of attorney for medical decisions

Each role plays an important part in helping ensure end-of-life situations are handled with respect and understanding.

Step 2: Review and Organize Financial Accounts

Your family or executor will appreciate being able to find your accounts easily. Begin by putting together a secured list of:

• Bank accounts and credit cards
• Retirement accounts (401(k)s, IRAs, etc.)
• Investment accounts
• Life insurance policies
• Any transfer on death (TOD) accounts

Step 3: Understand & Minimize Estate Taxes

Estate taxes can take a sizable bite out of what you leave behind, especially if you haven’t planned for them. While most estates won’t owe federal estate tax, some families are surprised by how quickly assets like real estate, retirement accounts, and life insurance policies add up.

2025 Estate Tax Thresholds

As of 2025:

• The federal estate tax exemption is $13.99 million per person (or $27.98 million for married couples)¹
• The annual gift exclusion is $19,000 per recipient ($38,000 per couple)²

Strategies to Reduce or Avoid Estate Taxes

To protect your legacy, consider these proactive moves:

1. Utilize your annual gift exclusions. By gifting now, you effectively remove appreciating assets from your taxable estate.
2. Leverage your lifetime exemption before it potentially decreases. This exemption may change in the future, so acting promptly can help you maximize this advantage.
3. Establish irrevocable trusts: Trusts can protect your assets from estate taxes by removing them from your taxable estate Consider options such as Irrevocable Life Insurance Trusts (ILITs), Grantor Retained Annuity Trusts (GRATs), and Charitable Remainder Trusts (CRTs).
4. Take full advantage of spousal exemptions. Use the marital deduction to transfer assets tax-free to your spouse and choose portability to transfer any unused federal exemption.
5. Title assets appropriately. Assets titled jointly with rights of survivorship or held in trusts may avoid probate. Confirm beneficiary designations are up to date and aligned with your overall estate plan.
6. Consider state relocation: If you're approaching state estate tax thresholds, moving to a no-estate-tax state (like Florida or Texas) could dramatically reduce your estate’s liability.
7. Revisit your plan regularly: Estate laws, much like your financial situation, can change over time. It’s a good idea to take a fresh look at your plan every 2–3 years or whenever big life changes happen.

Step 4: Keep Beneficiary Designations Updated

Assets like life insurance, retirement accounts, and payable-on-death bank accounts bypass your will. They directly pass to the named beneficiary, meaning if those details are out-of-date, complications may occur.

Double-check that all your beneficiary details are up to date for these accounts:

• Life insurance policies
• IRA, Roth IRA, and 401(k) accounts
• HSAs and brokerage accounts
• Pensions and annuities
• Social Security survivor benefits

Step 5: Plan for Final Expenses

Burial and funeral costs can range from $7,000–$12,000 or more. Providing guidance and setting aside some funds can help ease the burden on your family, allowing them to focus on their memories and healing.

To get the ball rolling, here are some options to help you start planning:

• Prepaid funeral arrangements allows you to work with a funeral home to pre-select and pay for service.
• Final expense life insurance, also called burial insurance, is a small whole life insurance policy designed specifically to cover end-of-life expenses like funerals, cremation, or outstanding medical bills.
• A designated payable-on-death account (POD) is a regular savings or checking account that designates a beneficiary to receive the funds immediately upon your death can often bypass probate if beneficiary designations are up to date. You remain in full control of the account during your lifetime.
• An emergency fund is basically a savings account that you've set aside to specifically help with any funeral-related expenses. While it's not a legal requirement, you can communicate its purpose in your will or chat about it with your executor or family.

Step 6: Consider Life Insurance

Life insurance provides a timely financial buffer when need it the most. It helps your family cover mortgage payments, debts, healthcare bills, and future goals like college or retirement.

Some types of coverage include:

• Term life insurance (affordable and time-limited)
• Whole life insurance (includes cash value)
• Universal life insurance (flexible premiums and coverage)

Step 7: Don’t Forget Digital and Health Assets

Your financial life doesn’t just live in file folders anymore; it’s spread across devices, emails, apps, cloud drives, and healthcare portals. Without access, your loved ones could face locked accounts, lost records, and stalled estate processes.

Be sure to include:

• Access details like passwords, unlock codes, security questions and answers, and two-factor authentication (FA) keys for all essential accounts, including banking, email, utilities, social media, and streaming services.
• A digital asset plan for email, social media, and cloud storage outlines how you want your online presence and data handled after your death. It can be part of your estate plan or a standalone document.
• Access to your health insurance and medical portals, which includes insurance portals, patient portals, and HSAs, as they often contain essential information for medical decisions, billing issues, coverage verification, and supplemental benefits.
• Keep your Social Security information organized by creating a mySocialSecurity account, securely storing your Social Security and Medicare numbers, and ensuring your executor knows how to notify the Social Security Administration after your death.

Without this, loved ones may struggle to close accounts or access records.

Pros & Cons of Early Financial Preparation

Real-World Example: When Preparation Paid Off

When Sharon’s husband died suddenly at 59, she didn’t have to scramble. They had updated their estate plan just months earlier, listing her as the sole beneficiary on all accounts. Life insurance paid off the mortgage. Retirement account transfers were quick. She avoided probate court entirely.

The result? She could grieve without bureaucratic red tape.

Please remember, this example is just for learning. For advice tailored to your needs, it’s a good idea to chat with a financial advisor to figure out the best for you and your family.

Final Thoughts

Getting your affairs in order isn’t about obsessing over worst-case scenarios. It’s about building a final gift of clarity, support, and care. Whether you’re 35 or 75, now is the time to make sure your financial legacy is a help - not a hardship - for those you love!

   Start your financial preparation for death today. Start Your Free Plan  

Sources

1. Estate tax. https://www.irs.gov/businesses/small-businesses-self-employed/estate-tax
2. Frequently asked questions on gift taxes. https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes