What would happen to your finances if you were to die? Would your family be able to easily pick up where you left off? Or would they be left scrambling to piece things back together?
Just think about all those disparate bank accounts… Investment and retirement accounts… The insurance policies… The deed to your home… Your car title… And on and on and on…
According to the National Association of Unclaimed Property Administrators, states are currently holding well over $30B in unclaimed bank accounts and other assets. In other words, the stakes are very high.
So what should you do to protect your family? Simple. Create a “death dossier” — i.e., a collection of documents related to every aspect of your financial life. Given the sensitive nature of these documents, you’ll need to be sure to secure them.
But where should you put them? That depends, in part, on your state laws. In some states, it takes a court order to open your safe deposit box, so it would be better in those cases to keep an original copy of your will — and any other documents that might require immediate access — with your attorney, at home in a fireproof safe, etc.
Next question… What all should you assemble? Here’s a list of items that experts recommend you keep on hand and accessible in the event of your untimely demise:
- Marriage license/divorce papers
- Personal and family medical history
- Durable healthcare power-of-attorney
- Authorization to release healthcare information
- Living will
- Do-not-resuscitate order (if desired)
- Housing, land, and cemetery deeds
- Escrow mortgage accounts
- Proof of loans made and debts owed
- Vehicle titles
- Stock certificates, savings bonds, brokerage info
- Partnership and corporate operating agreements
- Tax returns
- Life insurance policies
- IRA information
- 401(k) information
- Pension documents
- Annuity contracts
- List of all bank accounts
- List of usernames and passwords
- List of safe deposit boxes
- Last will and testament
- Letter of instruction
- Trust documents
To this list, I would add an investment policy statement (IPS) where you (or your spouse, or whoever is in charge of the finances) lays out your investment philosophy, goals, and strategy.
You should also be sure to keep a list of one-off items, such as life insurance coverage through your workplace. In most cases, you won’t have an actual paper policy, but your family still needs to know about this os they can make a claim.
For those passwords and usernames, I would personally recommend storing them in an encrypted password keeper such as 1Password, LastPass or KeePass. Just be sure that your spouse, executor, etc. know how to access them in a time of need.
If you’re nervous about relying on a technological solution such as this, print them out and stick a copy in your safe deposit box just in case. Just be aware that it will be a pain to keep these updated, so you’ll have to make a special effort to do so.
Confession time
Unfortunately, I’ve been pretty lame about all of this myself. Yes, we have an estate plan in place, and much of our financial life could be reconstructed from our tax returns. However…
Things aren’t nearly as streamlined as they should be. This has been a long-term goal of mine, and I’ve been piecing away at it. However, at the rate I’m going, I’ll probably die of old age before I’m done. 😉
Most recently, I’ve been working on writing an IPS, and I’ve loaded tons of info into 1Password. This goes well beyond usernames and passwords, and includes things like account and policy numbers, credit card numbers, etc. But I still haven’t shown my wife how to use it…
What about you? Do you have all your ducks in a row?
Having all estate planning documents and important papers together in all in one place makes things so much easier for those left behind.
My husband and I are in our 50’s and we really need to do this. I’m printing this out and doing it this week! Everytime we go away I have a panic attack the night before we leave because nothing is in place and our will is so old I’m not sure even where it is.
Thank you for waking me up. We’re traveling to Europe in 3 weeks and I really need to have this in place before we go.
I made up a quick one of these for my husband since he’d be lost without it. It’s in my in-laws safe – I figure my mom-in-law won’t let him starve to death that way, lol.
You gave us a great list I’ll definitely use to make sure ours is complete.
My husband writes me a letter each year that he puts with our life insurance policy and other documents. I haven’t read one yet (thankfully!) but I know one part of this letter addresses what I should do right away if something should happen to him. He updates it annually as our situation changes.
It means a lot to me that he takes the time to do this.
We got a copy of WillMaker when I upgraded our version of Quicken. We got through most of the listed documents, but my wife got too bummed out to finish.
Thankfully our situation is fairly simple right now, but once we add a kid – we’ll need to revisit those documents seriously, and even consider getting a professional involved.
Kevin: And a gift to yourself so you don’t have to think/worry about it every time you climb on a plane, etc. Perhaps it’s irrational, but my motivation to get this done always peaks just before I leave on a lengthy trip without my family.
This will be done one way or another. Either by you, which will be a real gift to the bereaved, or by your estate’s executor to satisfy the probate court.
Having gone through the deaths of two immediate family members in the last 4 1/2 years, I have to confess I felt freer to grieve over the death of a pet — Not that I loved the dog more than my own flesh and blood, but with an estate of two bowls and some toys, a few leashes, there was not the business aspect to it all. However, my dad’s passing was made easier on us because of the documentation he left us, including funeral instructions, which was great because we didn’t have to force our minds to think when that was the last thing we wanted to do.
The more you give your love ones, the freer they are to just grieve your loss. The information is truly a gift to those who survive you.
I admit i’ve slacked on putting this together as well. When we get our wills completed in early October I will put this together at the same time.