What Information Should You Leave For Survivors?

April 17, 2020

As we continue to practice social distancing and self-isolation, it may be an opportune time to take care of some the financial planning tasks we’ve been putting off.  Estate planning is often one of the issues that gets moved to the back burner.  It is never pleasant to consider our own mortality.  However, some simple steps can save our survivors a lot of trouble when the time comes.  Few things compare to the difficulty of losing a loved one, and that difficulty is often compounded by the immense pressure to make decisions at precisely the hardest possible moment.  Many of these tasks seem to require immediate attention, so it is important to take precautions to guard against making decisions while emotionally vulnerable. 

The first step you can take is to communicate with your family about your last wishes.  If you would like to be an organ donor, let your family know.  Even if you elect to be an organ donor on your driver’s license, it is important that your survivors know your wishes.  Next, talk to your loved ones about what kind of funeral or memorial service you would like.  If there are certain songs you want played or certain people you want to be involved, discuss that with your family.  If you have any particular charities that are important to you, make sure your heirs are aware.  These organizations can be the recipient of any gifts made in your memory.

Discussing these issues ahead of time is intended to reduce the stress that your family feels at your passing.  One of the issues that causes the most stress is among families is the passing of personal property.  If you have valuable personal property like art or jewelry, you may cover those items in your will.  However, you may have objects that are not financially valuable but carry significant emotional value for your heirs.  Make a note of who you’d like to have those things, and let your family know.

Speaking of your will, make sure your loved ones know where to find your important papers.  One good way to do that is to put together a binder or file with a list of where to find important documents.  Things like birth certificates, marriage and divorce decrees, and military discharge paperwork all may be important.  Keep a copy of legal documents like your will, general power of attorney, healthcare power of attorney and advance directives in this binder.  Note where your life insurance policies are kept.  Also include contact information for your advisors such as your attorney, financial advisor, CPA and insurance agent.  If you are still working, you may wish to have the contact information for your human resources representative here as well.

Once you have this information put together, it is important that you let your family know where to find it.  All the work you put into to organizing this information will be for nothing if your survivors don’t know where to find it when the time comes.  You should give a copy to an adult child or a sibling so that you have a copy off-site in case something happens to your home.  Don’t keep this binder or file in a safe deposit box, however.  Your family may need it at a time when the bank is not open, and the box may be difficult to access after your death.

As you are making these preparations, take a moment to make sure you check who you have listed as your beneficiaries on life insurance policies, IRAs, 401ks and other accounts.  Beneficiary designations are easy to change during your lifetime but become irrevocable upon your death.

The stress of the death of a loved one is difficult, especially your spouse.  Hopefully, with a little preparation you can make the financial aspects a bit less stressful on your loved ones.

To hear the podcast of the Smart Money Management radio show on this topic, or others, go to our website at alderferbergen.com.

 The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. 

Securities and financial planning offered through LPL Financial, a registered investment advisor.  Member FINRA/SIPC