What if you’re run over by a bus, or incapacitated by a stroke? Will your family be able to find the information they need to handle your affairs? Probably not.
Most people put off organizing documents that will be needed should they die suddenly or become incapacitated—until it’s too late. This leaves their survivors, who are then in no condition to do much of anything, to bumble their way through.
Don’t leave a mess for your family. Pull together the papers they’ll need now—even if it means getting a new will and other legal documents—and tell at least one family member where they can be found.
LEGAL DOCUMENTS
- Your will. Keep it in a safe place. Leave the original with the attorney who drafted it— but be sure he/she has a fireproof vault or bank vault and a good index of wills—and keep a copy at home. Write the attorney’s address and phone number on the cover of the copy.
Caution: Don’t put your will in your own safe-deposit box. In many states, the family can’t get immediate access to the contents of a safe-deposit box. Delay in obtaining your will causes probate to be delayed, and this means additional probate costs.
- Letters of instruction. Letters expressing wishes about funeral arrangements or listing items of jewelry each grandchild is to receive, etc., should be easily accessible.
- Durable power of attorney. Give signed copies of this legal document to the person named to act on your behalf in financial matters should you become unable to do so . . . or keep the form at home or with your attorney, but tell the person of his appointment and where the document can be found.
- Trusts. If you’ve set up a living trust to hold your assets and simplify the settlement of your estate, keep the trust document in a safe place. Leave the original with your attorney and keep a copy at home. Give a copy to any co-trustees and a copy to the successor trustee.
- Health care proxy and living will. If there are written expressions indicating the kind of treatment you want if your condition prevents you from writing and speaking, make sure such “advance medical directives” can be found quickly. Give a copy of your “advance directives” to the person you’ve named to speak on your behalf.
Precaution:
Give your doctors copies of the proxy and living will.
Be sure your family knows where to find . . .
- Your old tax returns.
- Copies of leases you’ve signed.
- Mortgages.
- Insurance policies.
- Bank account records, including canceled checks and other documents relating to your finances.
If you’ve given someone power of attorney over your checking account, make sure the person knows where you keep your blank checks.
ASSETS
Make a detailed list of assets and state where they can be found.
Example: If you have a safe-deposit box, note where it’s located and where you keep the key.
Make sure your agent has access to the box.
Include in your list of assets . . .
- Retirement accounts: Account numbers, beneficiary designations.
- Bank accounts: Account numbers and branch locations.
- Brokerage accounts: Account numbers and branch locations.
- Mutual funds: Account numbers and names of each mutual fund and fund family.
Important: Put bank books, insurance contracts, deeds to property and other evidence of ownership together and tell someone where these items can be found. Also, keep year-end statements from banks, brokerage firms and mutual funds.
If you’ve hidden cash or jewelry, let someone know where.
Also include with your list . . .
- Outstanding loans you may have that need to be repaid.
- Information about your other debts.
- Life insurance information.
- A family tree.
- Vital records, birth and death certificates, etc., of family members.
MEDICAL INFORMATION
In addition to a health care proxy and/or living will, your family needs to know about any special medical conditions you have. They also need to know about your medical insurance—including your Medicare card number and any Medigap or long-term care coverage you carry.
YOUR ADVISERS
Make a list of the professionals you use. Your family may want to retain them to handle your affairs. Include the name and telephone number of the following people . . .
- Attorney. He is the person who drew up your will and may be holding the original.
- Accountant. This person may have copies of your old tax returns.
- Stock broker.
- Insurance agent.
- Financial planner.
- Employee benefits person or department if you are, or were, employed.
- Doctors.
- Spiritual adviser, such as your priest . . . minister . . . rabbi.
ACT NOW
If you haven’t put this information together, do it now.
- Make sure papers are in order before taking a trip or undergoing surgery.
- Update information as needed at year-end.
(Source: Bottom Line/Tomorrow: Peter J. Strauss’s Advice on How to Put Your Critical Papers In Order)
How Long Records Should be Kept
Discard after one month: Deposit slips and credit card receipts (after checking them against monthly statements) . . . receipts for purchases of any items you don’t plan to return, unless they have warranties or are tax deductible.
Discard after one year: Monthly bank and credit card statements . . . pay stubs, monthly mortgage statements and investment statements (after reconciling with the annual summary) . . .telephone and utility bills that you don’t need to prove your business expenses.
Hold until sold: Confirmation slips for securities . . . real estate deeds . . . home-improvement records . . . and receipts for big-ticket items with replacement costs exceeding your home insurance deductible.
Forever filed away: Birth certificates . . . citizenship papers . . . marriage and/or divorce certificates . . . military records . . . wills . . . current insurance policies.
These documents can be kept in a fireproof home safe or safe-deposit box — with the exception of the original copy of your will, which should be kept at home or with your lawyer.