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.
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?