We read stories all the time about young people who die unexpectedly. Take the example of a 39 year old man who died in his sleep the day before his twins were born. Or the 22 year old competitive bike rider who died of a heart attack. Or a 31 year old man who drowned in a lake.
In the latter case, failure to plan meant the young man’s girlfriend and child, with whom he lived, lost their home and ended up without the support he had been giving them. The man, who I will call “Mike” owned a home and had a bank account. No other assets. Mike had 2 children with 2 different women. He lived with his youngest child and the child’s mother, who I will call Sara.
Because Mike had a mortgage on the home and no will, the house had to be sold to pay off the mortgage. As a result, Mike’s son and Sara had to vacate their home. Upon sale, the proceeds were used to payoff the house and whatever was left over, after attorney’s fees and costs, was divided between his two children. They each received less than $10,000.00.
What could Mike have done to save the house for Sara and provide financially for his children? Mike had a couple of options. He could have added Sara to the deed. She was helping to pay the mortgage anyway. Or, Mike could have drafted a simple will leaving the house to Sara. Although the house would still need to go to probate, Sara would have received legal title to the house. She would need to keep paying the mortgage and eventually obtain her own mortgage, but she would not have had to vacate the home and move in with her parents. The cost to draft a simple will is affordable.
In addition, Mike could have purchased life insurance policies to provide financial support for his children. The monthly premiums for a term policy for such a young man were affordable.
You may think because you have “nothing” you don’t need to plan for death. But people always have “something”. It may just be a small bank account or a home, but proper planning can ease the situation created by an unexpected death. Planning doesn’t need to take a lot of time or money. It just needs to be done!