Many people devote a significant amount of time planning how and to whom they will leave their assets. However, they often skip some very basic steps that can cause hassles for their heirs, hitting right at a time of great stress.
Here are eight basic steps you can take at any age to try to make life easier for those you leave behind.
Write a Trust and/or a Will and keep it updated
A Trust and a Will are legal documents that define how your assets/estate will be distributed when you die. The difference between a will and a trust is a will is an instruction to the probate court and a trust is a living private agreement that provides for you during your disability and upon your death what happens to the assets. In both documents someone is named to be responsible to carry out your instructions. In the will, you name an executor also know as a personal representative who will be responsible for carrying out the terms of your will and in a trust you name a trustee. If you have children under the age of 18, the will or a special appointment should name a guardian. You should keep your documents updated and have multiple copies stored in more than one place.
Compile important information in a notebook
This notebook will be the “go to” resource that helps your family and your estate lawyer make important decisions quickly and efficiently. Make certain that your executor knows its location.
Key items to include:
A net worth statement that lists your assets and liabilities
A list of important contacts
Your last wishes including the type of burial and any religious requests
A list of key documents – such as wills, trust documents, deeds, and titles – and where to find them
Review your beneficiaries
Most people choose their beneficiaries when they first buy insurance, open an investment account or start a new job. But decades later, life may have changed and old choices may need to be reconsidered. For example, there may have been a divorce, the birth of new children, or the addition of grandchildren.
Assets such as insurance policies, retirement plans, and individual retirement accounts require you to name a beneficiary. Simply contact the companies who manage your investments to make changes.
Make stock and bond certificates easy to find
Don’t keep original stock or bond certificates in your home or in a safe-deposit box. Instead, have your investment adviser or fund company hold them. This will keep assets from being overlooked when your estate is settled, and save time and effort for your beneficiaries.
Set aside cash to pay debts
In the wake of a death, it can be difficult for executors to access accounts quickly. Regular monthly bills will still need to be paid, so it’s important to have a money market or checking account funded with enough cash to cover two to three months of costs.
Write an ethical will or family letter
This may be the single most valuable possession you leave to your children. Ethical wills can take many different forms – you can tell your personal or family history, explain your estate planning decisions, or express your feelings to close family members.
Keep your home market-ready
Don’t let clutter accumulate in your home. If your children are grown, encourage them to remove their childhood possessions from your house once they have space to store it themselves.
Talk to your family now
Remember that it’s far easier to have these difficult discussions while everyone is in good health. Try to hold a family meeting at least once every five years that includes everyone significantly involved in your estate.
Regardless of your age, taking these steps will provide peace of mind and help you feel more prepared for whatever comes next. Your heirs will appreciate it long after you are gone.
Source: Deborah Levenson, Braver Wealth Management, The Boston Globe http://www.boston.com/business/personalfinance/gallery/helpyourheirs