Where there’s a will, there’s a way—and sometimes an ugly family feud. Families are consumed with grief when a loved one dies, but unfortunately certain legal and organizational tasks that arise can’t be ignored or put off for long. But you can ease the burden on your loved ones by making some simple preparations in addition to a will.
Sometimes your family may need more detail than what is normally included in a will. To get in front of hard feelings and potential conflicts over your personal possessions, think about adding a letter of instruction to your will. This is an informal document you can draft which isn’t legally binding, but can be a helpful guide for your family.
A recent article in The Wall Street Journal, titled “When a Will is Not Enough,” suggests that you organize your letter into three sections: funeral arrangements, financial and personal affairs, and distribution of personal effects.
In this first section on funeral arrangements, include a list of people to notify upon your death, and also include relevant organizations, government agencies, your estate planning attorney and CPA. You can also state if you want to be an organ or tissue donor (add the donor organization’s contact info), specifics on burial (cremation, for example), and any details about your funeral service. Also, if you’ve paid in advance for funeral arrangements, attach those details and cemetery information or where you want your ashes to be placed. You can also add in this first section any charitable donations in your honor, and you can sketch out an obituary in advance.
Keep this first section where it is readily accessible, perhaps with other important personal papers, and make sure a family member or your executor knows where it is.
The second part of the letter is for up-to-date information on your personal financial affairs for a family member or executor. Here is where you should list the contact information for your employer, attorney, financial planner, insurance agent, and stockbroker.List all financial accounts and the contact info for your account beneficiaries, and ensure that your designations are up-to-date. These designations trump any terms about this in your will if the two conflict.
The original article also suggests that you retain an up-to-date list about debts owed to you, like a mortgage, car loans, or credit cards. Another list should be all of your computer passwords and passwords to online accounts, and provide the location of safe-deposit or post-office boxes and where you keep the keys or the combinations. Given that the second section of your letter contains sensitive and personal information, keep it in a locked fire-proof box in your home. Give the combination or a key to the box only to your executor.
Third, you can go into greater detail than in a will to designate who should receive all of your important possessions. You can even add individual notes to family members with the main document.
It’s important to plan ahead now. Work with an experienced estate planning attorney to get organized and have the peace of mind that you’ve done everything you can to have your affairs in order.
Reference: Wall Street Journal (November 15, 2014) “When a Will is Not Enough”
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Planning for Death Is Unpleasant, but Critical Nonetheless
Once someone dies there is much work to be done. These are a few suggestions to help you get administratively organized for death.
To make death easier for all involved, it’s critical to plan some of the issues related to death far in advance with some contemplation to make everything go as smoothly as possible when a loved one passes away.
When a loved one dies you have to remember IRS deadlines, Social Security Administration requirements, compliance with state laws, and dealing with other grieving family members. There’s also the chance you might have some relatives who feel entitled to more or different assets.
While you should work with your own estate planning attorney, a recent MarketWatch article, titled “9 steps to getting your estate plan in order,” offers some ideas to help you start the process.
Although it’s not easy, discuss the issue of death with your family and determine what each person's end of life wishes are. Experts say that it’s sometimes more comfortable to do this when someone outside the family has died. You want to build a foundation for a smooth transitional experience to make things be as painless and well-organized as you can for your family—as well as for yourself.
Get to know the inheritance laws in your state, and don't assume that, if you have a will, your wishes are set in stone. Some idea of how property passes on death in the state where you live will be helpful. The laws governing property division can get tricky, so consult with an estate attorney. Select an estate planning attorney who’s experienced in estate, probate, and tax planning, and head to the meeting prepared with your questions.
Your attorney will ask you questions about your real property, personal property, and all other assets, guardianship decisions, medical preferences, end of life bequests, and more. You’ll talk about a will, the possible need for a trust, and deciding on an executor of your estate.
Remember that all of your life insurance, annuities, 401(k), 403b, and IRAs are passed to your named beneficiaries, not through your will in probate. It’s important that your beneficiary designations are current and accurate. Speak with the administrators of the investments and get a copy of the beneficiary assignments currently on file—if you need to update or change your beneficiaries, do it right away! Once you’ve submitted the changes, be sure to request confirmation of the change and keep it with your records. Remember that the release of money to the designated beneficiary is contingent on producing an accurate and legible death certificate.
Start a joint checking account with the executor you select. This will give them funds that may be required to pay for funeral expenses, travel for family members, paying for people to help with immediate needs, and bills that come due while waiting for accounts to be released and settlements to be completed.
Set up a secure filing system. This needs to be easily accessible and should contain important documents like birth certificates, Social Security numbers, military discharge papers, marriage license (or a copy of your divorce decree if applicable). You should also provide the location of the safe-deposit box keys, a list of benefits from your current or past employer (such as a benefits brochure), the contact info for your estate planning attorney, CPA, financial adviser, and insurance agent.
Think through what would happen to your investment portfolio if your spouse, child or significant other isn't able to keep up with the activity or isn't knowledgeable to interview and hire a good person to get into the portfolio accounts due to the absence of passwords.
Don’t allow your estate to be drained because it’s not getting proper attention. Be prepared and consider carefully who will handle this for you. Work with an experienced estate planning attorney who can coordinate this essential planning.
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Reference: MarketWatch (November 3, 2014) “9 steps to getting your estate plan in order”