It's the Start of 2019 - What Estate Plan Documents do I Need?

Years ago I wrote a blog post about a Wall Street Journal article on “The 25 Documents You Need Before You Die” and how they can impact you and your estate after you’re gone. The timing seemed perfect for me as I had just launched my own business. In the early days, I spent a lot of time thinking about what was next for my business and my growing family. One of the key takeaways from the article was to at least start the process of assembling these documents. Many of them you already have. Perhaps they are scattered around the house. Having them in one location makes it easier for someone who is administering your estate.

 

Eight years later, the general framework is a good one to review as the new year begins. The article broke the documents into 6 categories:

These are the documents that most people are likely to have (their Will, Letter of Instruction and Trust documents). Especially after major life events (i.e. marriage, birth of a child, divorce), it is important to review these documents and update them as necessary. It is far too common that I meet with a client who has a will from about 20 years ago. Since then, they’ve been married, had kids, maybe even got divorced, and never updated it.

You can often find these in that large pile of paper that someone gave you after you bought something. When you sat down and did your real estate closing, buried in that packet are some important documents. Bought a new car? The paperwork involved these days can span more than 100 pages. It’s important to have these documents and identification of assets and liabilities available to ease the distribution of your estate after you are gone.

I was a bit concerned about the suggestion of providing a “list of all user names and passwords” for your bank accounts. Since the article was written, a variety of new programs have been created to address this. One of the most common and effective is a good password manager. I’m not endorsing any particular program (you can do your research for what you prefer). But using a password manager and providing access to the master password should keep you covered for online access to these accounts. It will also provide some safeguards for your protected information (better than a little notebook with all your passwords sitting on your desk).

Since the article was written, many of our health care records have been digitized. When you go to the doctor, you fill out a variety of forms. Sometimes you do this on a tablet and have the forms emailed to you when completed. Regardless of how they are stored, access to health care documents is important for your loved ones.

Most people probably have a folder in their desk for their life insurance and retirement account information. You get your monthly statements, file them away (maybe even scan them into digital format and destroy them?). You never really think about them again. But what happens after you are gone? Will your filing system be incomprehensible to those who are trying to administer your estate? Time to update that system?

These documents (marriage license, divorce papers) are ones that people seem to underestimate the importance of. True, your marriage license probably won’t be needed for many things beyond a name-change on your accounts, but your divorce papers seem to be needed everywhere. These days, Judgments of Divorce are readily available from the Courthouse where your divorce was granted (prices vary for “certified” copies, which are often required). It’s usually a good idea to pay for a few copies at the time of your divorce and keep them handy. Normally you won’t need them, but what else are you going to do when your ex-spouse’s creditor pops up on your doorstep and tries to hold you liable for some debts that the ex ran up? Surprisingly, they won’t take your word for it and will probably need more proof from you.

Next Steps

It’s the beginning of the year and there are a lot of reminders in front of you. Maybe it’s your new year’s resolution to get your documents in order? For some people, they just need someone to keep them accountable to get their estate plan finished. If you’d like to get 2019 off to a strong start and make sure your financial plans are up-to-date and appropriate for your current situation, call my office to set up a meeting and we can review the best options for you – (877) AMAYERS.