5 Simple Things to Prepare Now for Your Estate
Everyone knows about the big things people should prepare for their loved ones in the event of their untimely passing: a will, life insurance and a living trust.
Beyond that, there are a number of little things you can do to make things much easier on your loved ones if you were to pass on. These things are all easy to prepare, don't require a lawyer and will be helpful to your family and friends if these documents are ever needed.
The best thing you can do is have a safe-deposit box at your local financial institution that contains these documents. Also, make sure your executor and your spouse know how to get into the box.
An account list. Prepare a simple document that lists all of your financial accounts, your account numbers and contact information for those accounts. If the accounts have stated beneficiaries, include those as well.
After you pass, this document will become an incredibly helpful checklist for your executor and your loved ones as they move through the process of clearing out your accounts and ensuring money goes to the appropriate people. Many hours of effort during one of the most trying times of their lives can be saved with a half-hour of effort on your part now.
This document is often referred to as a "letter of instruction" and is given to your will's executor.
A folder containing proof of ownership documents. In a single folder, you should include the deeds to any property you own, including land and vehicles. You should also include a statement of any accounts with significant assets -- your retirement accounts, investment accounts, savings accounts and so on.
These documents can help your family demonstrate ownership of your assets when resolving your estate. Having them all in one place will make it much easier for them.
It is vital that you update these documents regularly. Choose one day a year during which you update these documents, probably near the end of the year. Mark that date on your calendar. After you complete the task, mark it again for next year.
An advance directive form for your state. This document will help your family assess how to handle your medical needs should you be unable to do so. Not only does it assign decision-making power to a person you designate, it also spells out exactly what measures you want taken to sustain your life.
Each state has a simple-to-use form for taking care of this. In many states, you're required to have the final document notarized for it to have legal standing. This is a simple step, since many banks offer notarization services that make the process simple.
Marriage and divorce paperwork. Make sure you have an easy-to-locate copy of your marriage certificate if you're currently married. If you're divorced, include copies of your divorce decree from those marriages.
These documents are necessary for establishing who your current spouse is (or isn't) and preventing inappropriate people from accessing your assets.
You can, of course, augment these documents with a clearly crafted will or living trust indicating that you wish to have some of your assets given to your unmarried partner or a former spouse. These documents establish which people have legal rights regarding your full estate.
A letter to each of your loved ones. Spend some time writing a letter to each of your closest loved ones, telling them how much they mean to you and reflecting on some of the moments you shared. These things can be hard to say in day-to-day life, but by spending the time to write a letter, you can rest assured that they will know how you felt should you pass on.
The simple process of writing these letters can encourage valuable self-reflection and assessment of the state of your life and relationships. It can bring about positive change now, not just later.
Taking care of these documents is a simple task that can bring you great peace of mind. Spend an hour or two assembling these things, and store them in a safe place. You'll be glad you did, and your family members will be saved enormous amounts of stress if something were to happen to you.
Trent Hamm is the founder of the personal finance website TheSimpleDollar.com, which provides consumers with resources and tools to make informed financial decisions.
