A Paper Trail for Your Heirs

Typically the New Year prompts resolutions or changes such as joining a gym or going on a diet. Here’s something you can do that is easier than a diet and more valuable to your loved ones. Make a paper trail for your loved ones. You don’t have to be facing death to do this. You could be helping your family cope with an unexpected health issue that renders you incapacitated for a while.

There are various ways you can do this. you don’t have to adhere to any specific rules. You can do an internet search for “documents to share with heirs” to find several articles and products. Going through this process can have other benefits. You can double-check the beneficiaries on your life insurance policies, annuities and pension benefits. You can ensure your financial documents end up in the right hands. You can show your love for your children by making a transition easier.

Estate Planning

Your paper trail should include the name and contact information for your estate planning attorney who has your original or copies of executed documents. This can make a difference for your loved ones right off the bat. They will be able to find out the beneficiaries of your estate as well as who you chose to be your administrator or executor, your health care surrogate, and your power of attorney or guardian. If you do not have an estate planning attorney, be sure to include a copy of your Will, Power of Attorney, trusts and other estate documents. List your beneficiaries, who gets what personal items and locations of important items.

Professional Advisors, Financial Assets & Cash Flow

As I learned when my father passed away, it is very difficult to search for financial assets. Financial institutions can refuse to release or verify account information. Your paper trail should include a list of financial institutions, account numbers, advisor name(s) and real property. Also include such information as income sources, automatic bill paying and how to stop them, credit card information and charitable contribution details. Keep this information in a safe place to protect you from identity theft. Update it annually.

Beneficiaries

It is important that beneficiary designations are correct and complete. Not much can be done about incorrect or incomplete beneficiary designations after you are gone. These will be on retirement accounts, life insurance policies, annuities and pay-on-death accounts. A beneficiary designation form is designed to be a contract. It will dictate who will get assets regardless of what your Will says. Years ago I heard about a pension benefit that went to the former spouse instead of to the widow and four children because the deceased never updated his beneficiary designation.

Passwords

Having a list of passwords can save your loved ones a lot of headaches. If you have a password software, be sure you list the password to open it. If you do not have all your passwords on this kind of application, you should list the passwords that are not included. Remember to list the password to your computer and your cell phone. This will give heirs quick access to your contacts to notify them of what has happened.

Final Arrangements

Making final arrangements for a loved one is very difficult and heart wrenching for those left behind. When you leave instructions for final arrangements for your family, they will know that you created this out of love and consideration for them. This will help them on both a practical and emotional level. One of my colleagues prepared his own final arrangements folder after his father passed away. His dad had done this for his children, making things so simple for children and the rest of his family. Like my colleague’s list, your list can include suggested Pall Bearers, favorite music and suggested favorite scriptures. All this can be contained in an accordion file. His grown children know where to find the accordion file and his trusted office assistant knows where to find an electronic copy of the contents in his computer.

The Dave Ramsey Legacy Drawer

Financial advisor, Dave Ramsey, suggests a Legacy Drawer. He recommends that it be somewhere in your home and contain everything that relates to your financial life. The real value here is in the objective that you organize it so that anything can be found within 30 seconds. Clearly mark files so that your grieving family members can find whatever they need. Include a personal letter or letters to your loved ones that you update periodically. A recent letter may mean more to your children than one you wrote when they were in kindergarten. Be sure you include the location and directions for access of your safe deposit box in your Legacy Drawer. You can read more about this at www.daveramsey.com.

A Death Book

Not a pretty name, but you get the idea. This is similar to a Legacy Drawer, but in a binder instead. You can find the complete description at www.marketwatch.com. This is a do-it-yourself three-ring binder. It includes how to notify the Social Security Administration, investment funds and brokers as well as pension and annuity administrators. That alone will save your survivors several hours of frustrating phone calls. Include a section for important actions like required minimum distributions, taxes, reservations for trips, award points, log of home maintenance records and whom to call for repair needs.

The Caregiver’s Journal

There is also a website that sells an organized binder called Personal Plans That Live On. It has tabs and plastic sleeves designed to help your caregiver when you are terminally ill. It is not exclusive to this use, but that is an added aspect. It has 28 sections and costs about $34 including shipping. You can find this at familyinformationorganizer.blogspot.com.

Get It Together: Organize Your Records so Your Family Won’t Have To

This is the most comprehensive system I have found. This Nolo Press book is actually titled Get It Together and sells for $20 for the downloadable version or the paper binder. It is in its sixth edition and is designed and compiled by an estate attorney and a consultant who live in northern California. You get the 416-page book with directions on what to do. Then you can download the forms that are ready for data entry. You can pop the forms into your own three-ring binder or store them in an accordion file or a Legacy Drawer. You can find this at www.nolopress.com/products/get-it-together-get.html.

Your Wallet

Even before you prepare a Legacy Drawer or an accordion file, you should create a card for your wallet called “In Case of Emergency”. You don’t need to find a pre-printed card. You can create one on bright color paper. Use ink that will not smear if it gets wet. List your name, date of birth, blood type, address, cell number and cell phone password, whom to contact, physician’s name and contact information, and your allergies. Trade copies of this card with your spouse and other loved ones.

Update Update Update

Update your information at least annually if not more often. Get a new credit card? Toss a copy of the front and back of the card into your accordion file. Change your Will? Remove the old one and insert the new one to avoid confusion. And make it a New Year’s resolution to write those treasured letters to your loved ones before the Super Bowl.