The following is a guest post from Mark Gavagan, author of , a quick and easy-to-use tool for organizing your life and getting your personal & financial affairs in order.
My father died unexpectedly in March of 2003. He was 67 years old.
Fortunately, we knew he wanted to be cremated, followed by a small graveside service. Not having to guess at his wishes made this terrible time much easier.
Despite my father being fairly organized with a logical filing system, my family spent many grief-filled hours over the following weeks looking for important documents, advisors, insurance, keys and operating instructions (e.g. How do we turn off the alarm system at his house?).
It's amazing how much valuable information resides within each of us. Unfortunately, when we're gone, it's gone.
So how do you make sure that if something happens to you, loved ones left behind won't have to spend hour after hour searching for critical documents or information while agonizing or fighting over what your wishes might have been?
Get organized, discuss your wishes with loved ones, then write everything down!
It's important to document everything even after a clear discussion, because loved ones are often overwhelmed in a crisis and unlikely to remember or all agree in their recollection of what was said.
It's possible to adequately do this on your own, without buying any book (did I really just write that?). A clearly-labeled notebook is just fine, as long as it's well-organized and you cover all the major issues and important details.
Here are the twelve major areas of critical decisions and information your loved ones need to know:
1. Personal & Family Information. Just as you'd guess, this is the basic information that might be needed to manage your and/or your spouse's affairs and complete dozens of government, insurance and other forms: name, maiden name, legal address, date and place of birth, location of birth certificate, social security number, driver's license number, and passport number and storage location. Also, include records of any military service (country & branch served, induction date, discharge date, service ID# and the location of DD-214 discharge papers).
2. Family Medical History. Here is a . Anyone is welcome to print this out for their own personal, non-commercial use.
Pay particular attention to the “Extended Family's Medical History” pages. Certain illnesses and diseases, such as alcoholism, heart disease, high cholesterol, depression and many cancers, tend to run in families. Share this information with other family members and your doctors since it may be very helpful for early diagnosis or preventative measures.
Once completed, consider placing a photocopy in your travel luggage.
3. Insurance. For each policy (life, health, disability and long-term care, etc), document the type, insurance company, policy number, policy owner, person(s) covered, benefits, beneficiaries, premium schedules and the location of your records.
This item and the two immediately following will also be very helpful for efficient (i.e. less expensive if you pay by the hour) meetings with financial planners, CPA's, insurance agents, estate planners, or the like.
4. Investments, Bank Accounts & Other Financial Assets. For each account, list the firm's name, account #, ownership type, owners, account value, investment strategy, beneficiaries and the location of your records.
5. Retirement Plans & Annuities. For all of these, list the same as for category #4 above. In addition, for each retirement plan, list the type (e.g. 401(k), defined benefit, SEP, etc) and the sponsoring firm's name. For annuities, also list the insurance company, person(s) who receive payout benefits, date the annuity was purchased (“contract date”), date annuity benefit payout benefits were or will be first received, and a description of the payout benefits (e.g. “$2,000 per month for the longer of 10 years or until the death of Ronald G Smith Sr.”).
6. Real Estate. Note the property's address, whether owned or rented, type of ownership, owners, purchase date & price, all liabilities (primary and secondary mortgages, home equity, liens, etc) against this property (these should be detailed in the #7 “Debts & Liabilities” section below) location of key documents (deed, purchase or rental documents, title insurance, etc), location of important keys, property taxes and fees, description of how important systems (alarm, heating system, electric, cooking gas, water, etc) operate or can be shut-off, and trusted service & maintenance providers (electrical, plumbing, air conditioning, etc).
Other topics that are important but don't fit neatly into any major category are: an inventory of your most important valuables (description, value, location of appraisal), records and strategies related to tax issues, and information about safes, safe deposit boxes and storage units.
7. Debts & Liabilities. Includes all loans, mortgages, lines of credit, leases charge accounts and credit cards. For each, list the type and nature of the liability (e.g. “Lisa's undergraduate student loan”), name of the firm owed the money, who is liable, balance, interest rate, payment schedule, payoff date, account number, and the location of your records.
8. Advisors. Who are the professionals you rely upon for investments, insurance, tax or legal advice, etc? List their names, information, areas of expertise, past work done for you and the location of your records.
9. Wills, Trusts & Estate Plans. Describe all of these (if applicable) including date, place and method of creation, where documents are located, info for advisors used. If any of these were created via a “do it yourself” book or software program, also note the full title, publisher
It is very important that you have a current and valid will. Otherwise:
- If you die without a valid will (“intestate”), the laws of the state you live in will determine such critical issues as who raises your children and what happens to your assets. Moreover, if you have no will when you die and you have no heirs in the eyes of your state’s law (e.g. living children or parents), all of your assets will become the property of the state, instead of the friends, relatives or charities you would have chosen to inherit them; or
- If you die and have an out-of-date will, it may be declared invalid if it doesn’t properly meet legal requirements (see “intestate” above); or
- If you die and have an out-of-date will that is valid, it will require that old decisions be carried out, even if they don’t reflect your current wishes or circumstances. For example, you may end up leaving your entire estate to an ex-spouse instead of your favorite charity (or book author).
Even though the last three items below can be very difficult or awkward to speak about, make sure to talk with your loved ones about your wishes on these issues (and of course, write everything down). This two-way communication gives them a chance to understand your preferences, ask questions, and voice concerns. This step is very important because it lays the groundwork for making sure your wishes are carried-out. Another benefit of these discussions is that you'll uncover their preferences and hopefully motivate them to take the steps you're taking.
10. Advance Health Care Directives. This is especially important. Remember the tragic case of Terri Schiavo, who collapsed at 26 years old and became incapacitated? Her loved ones engaged in a seven year court battle regarding whether or not she should be kept alive via artificial means while in a persistent vegetative state. What would you want?
There are two distinct elements to advance health care directives, though some states combine them into a single document.
First is a “living will,” “health care declaration,” or “directive to physicians,” which is a signed document directed towards health care professionals specifying the kind of care you wish to receive in the event you become incapacitated and cannot communicate on your own behalf.
Second is a “medical power of attorney” or “durable power of attorney for health care,” which is a signed document where you appoint a trusted person (called your health care “agent” or “proxy” or “attorney in fact”) to make medical decisions for you in the event you become incapacitated and cannot communicate on your own behalf.
One other related element is a “durable power of attorney for finances” where a financial agent or proxy is authorized to pay your bills, file insurance claims and conduct other elements of your financial life.
A good resource to learn more and access free advance health care directive forms for each state is 501(c)(3) non-profit .
11. Organ+ Donation Choices. Donating organs & tissues when you die may save or enhance the lives of as many as fifty people. There is no cost to you in donating. If you wish, open casket funerals can still take place afterwards. No one is too old or too young, so don’t rule yourself out as a potential donor. Even those with serious medical conditions often have many healthy and desperately needed organs and tissues to give.
To learn more, including information about how more than two dozen religions regard organ, tissue and whole body donation, and to access your state’s specific donation documents, please visit a website run by or , a 501(c)(3) non-profit that links to each state’s specific donation forms (or call 814-782-4920.)
Here is (note: this does not replace an official organ donation form). Anyone is welcome to print this page for their own personal, non-commercial use.
12. Final Arrangements. Here are four topics to cover regarding your preferences:
First, how expensive should your overall final arrangements be (either a general dollar range or simply “very inexpensive”, “moderate cost”, “higher priced” or “premium”)? Otherwise, loved ones may feel pressure to spend huge sums of money to “show” how much they care.
Second, outline any military burial/memorial benefits, prearranged or prepaid funeral plans, and membership in any Memorial Society.
Third, do you want your body to be cremated?
Fourth, what is your choice for the final resting place for your body or cremated remains?
For more consumer advice about funeral purchases, as well as information about your legal rights, read the Federal Trade Commission’s free publication “Funerals: A Consumer Guide”. It’s available or by calling toll-free 1-877-382-4357.
Lastly, where should all of this documentation be kept and how can you be certain it's secure? This has been the #1 concern of almost every person I've encountered who has begun addressing these issues.
While security is important, along with concerns about losing your information in the event of a flood, fire or other natural disaster, these must be balanced with the need to make sure the information and decisions you've taken time to write down can be accessed when needed.
A bank safe deposit box probably isn't right because it can't be accessed when the bank is closed, or when any owner/lessor of a safe deposit box dies (this depends upon the laws of your state). It might take weeks or even months before the box can be opened, so decisions about organ donation, living wills and final arrangements wouldn't be available when needed.
Overall, one of the best options to consider for storing documentation of your critical decisions and information for your loved ones is small safe or lock box in a location that is hidden, yet accessible. Make sure the safe of lock box is rated to protect against both fire and water (many are not). Also, make sure one or more trusted loved ones know you've written all of your information and decisions down and are able to gain access quickly in a crisis.