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PERSONAL FINANCE

Do Your Family a Favor: Get Organized

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Perhaps you've decided to make your will, and maybe you're even thinking about more complex estate planning strategies, including ways to pass your property without paying probate fees or estate tax. These are important steps to take, but don't overlook practical issues as well. After you die, your loved ones will have to cope with many things not covered in your basic estate planning documents. Among these are:

  • Do you want a funeral or a memorial ceremony? If so, what type?
  • Do you want people to send flowers, or would you prefer donations to charity?
  • Who should be notified about your death and funeral?
  • Did you prepare a will or living trust? Where is the original?
  • Did you own a life insurance policy, pension, retirement account or annuity? Where are the documents stored?
  • Where did you have bank accounts? Did you have a safe deposit box?
  • Did you have stocks, bonds, or money in mutual funds? Where are the records?
  • What real estate did you own? Where are the deeds?

Unfortunately, most of us carry this information around in our heads--if we've thought of it at all--and never discuss it with our family members in a comprehensive way. Our loved ones must do their best to sort it all out later.

Costly or painful losses can result from a failure to organize your affairs. Stocks, bonds, bank accounts, real estate, and insurance policy benefits may go unclaimed and be turned over to the state government. This happens surprisingly often. In fact, billions of dollars currently sit in state treasuries because the rightful property owners couldn't be found. Millions of dollars worth of unclaimed assets are added to these coffers each year.

On a more personal level, relatives or friends may not be promptly informed of a death, and valuable pieces of family history may not be passed down to future generations.

Fortunately, losses like these can be avoided with a little bit of advance planning, sorting and organizing. Making things easier for your family is not difficult, but it may be time-consuming. It's best to break the task into manageable sections and take it one step at a time. Start by thinking about some broad categories of information:

  • Funeral plans (arrangements and whom to notify)
  • Insurance policies
  • Wills, living trusts, deeds and other important documents
  • Pensions and retirement accounts
  • Bank, money market and mutual fund accounts
  • Items in safes, safe deposit boxes and other locked or hidden places
  • Important information about family history, including the location of photographs, heirlooms and other irreplaceable items

Then think about organizing this information in a way that will help your family handle your affairs after your death. You can structure the information any way you like--even some notes scribbled on a piece of paper and left in an accessible location are better than nothing. But if you have the time and energy for it, consider a more thorough approach.

To organize your personal information, you can turn to self-help products. One book, Everything Your Heirs Need To Know, by David S. Magee (Dearborn Financial Publishing), offers forms that prompt you to describe your family history and interesting information about your own life as well as the type and location of each of your assets. However you choose to organize your affairs, what's most important is that you create a clear, easily accessible system that will light the way for your family and friends.

When you've got everything in order, be sure to store your information in a safe place. You might consider keeping your papers or computer disk with your will in a fireproof metal box, file cabinet or home safe. And be sure to discuss your new records with those closest to you. All your careful work will help them only if they know where to find it when the time comes.

Copyright 1999 Nolo.com, Inc.

Last updated: Oct 21, 1999




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