Below is an excerpt from one of the letters my wife Kimberly and I have written to our loved ones, to be read in the event of our deaths. This letter is not itself a legal document – such as a will or trust – but is intended as a supplement to them. It explains how and why certain decisions were made, and also provides guidance about the intent and purpose of funds we provide and how we would like certain details carried-out.

The following section of the letter is directed to the family members specified in our wills as guardians for our two children.  The funds mentioned are term life insurance benefits paid directly to the guardians:

We expect that, in order to accommodate Audrey & Sophie (our two young daughters) into your household, you may decide to move to a larger house, or add additional living space, or make other changes to your current residence.  We are allocating $350,000 to you for this purpose (the New York City suburbs are very expensive).  A great deal of changes may be needed in order for you all to live comfortably, including larger or additional bedrooms, a larger dining table and eating area,  another bathroom, upgraded electrical or water service, etc.

It’s not important to us that Audrey & Sophie each have their own bedrooms, or that they share a bedroom – what’s important is that you talk with them about the issue and use your best judgment when making the decision.  As always, they should be treated lovingly, but no better or worse than your own children.

You may need a new, larger vehicle, either now or in the future, as well as another one six years or so later.  We are allocating $60,000 to you for this purpose, figuring that a mid-level (minivan – brand omitted) today is around $30,000.

Life throws us all a few unexpected twists and turns, so we’re allocating an additional $90,000 to you for a rainy day or opportunity, per your judgment.

The $500,000 funds above ($350k + $60k + $90k) are entirely yours, with virtually* no strings attached. For example, if your larger house, bought or built in part with the money above, sells for a ton of money sometime down the road, that does not belong to Audrey & Sophie – the sale proceeds would all belong to you, to do with as you wish.  We hope you will consider keeping the funds we provide in an account separate from your other household and business accounts, but that is your choice.

*Our only request is that you amend your wills so that in the event of your death prior to Sophie reaching age 18 that least $250,000 of the above house funds go to (Audrey & Sophie’s alternate guardian) for the same reasons the funds are going to you – to comfortably offset the expenses associated with Audrey and Sophie.  Once Sophie (our youngest) reaches age 18, feel free to amend your will(s) and allocate this money however you wish.

My next post includes the next section of this letter, outlining specific dollar amounts we provide to cover the extra day-to-day costs our guardians will incur while raising our children.

Mark Gavagan is the author of two books to help families organize their finances and get their personal affairs in order: “The It’s All Right Here Life & Affairs Organizer” and “12 Critical Things Your Family Needs To Know” .

I think it’s often good to illustrate how life insurance has helped a real person.  It makes it hit home.  To see more real life stories like this one check out the LIFE Foundation.

Mark and Kathy Custead enjoyed a comfortable, middle-class lifestyle, but their financial obligations were considerable. So with their agent’s help, they completed a life insurance needs analysis, which showed that both needed to substantially increase their coverage. They each made life insurance purchases, something neither had done since their first child was born 17 years earlier. That spring, Mark was diagnosed with pancreatic cancer and died five weeks later. Proceeds from his term life insurance helped to pay funeral expenses, medical bills and credit card debt, and have allowed Kathy to set aside money for the kids’ college costs.

Be sure to check out this video featuring Mark and Kathy’s story.

We love when people on our team are recognized for being at the top of their game. Recently, our VP of marketing and business development, Sean Cheyney, was interviewed by one of the most well respected luminaries in the interactive advertising community. If you’re interested in hearing what makes our head of marketing, and fellow blogger on this blog, tick then click here to listen to his recent 30 minute interview.

http://personallifemedia.com/podcasts/232-dishymix/episodes/13608-sean-cheyney-21st-century-marketer