If you asked your children to make sense of your finances without any input from you, would they be able to do it? Would they be able to piece together the information they need without knowing your computer passwords? Would your filing cabinet give them the answers to questions about your assets, debts and accounts?
For most people, financial record-keeping is something they do haphazardly, if at all. You know where to get the information, should you need it. But for someone on the outside looking in, it is probably an impossible tangle of outdated or missing documents placed among countless other papers. Unfortunately, in estate planning, it is often necessary for someone to make sense of a deceased person’s financial life without the preparation or tools they need to be successful.
A Spouse Or No One
In general, people share important financial information with either their spouse, or no one at all. People are naturally, and rightly, careful about sharing some financial information. Careful is good, but it can go too far. If an account goes unnoticed, the people you want to protect with your estate plan may never receive the benefits of your legacy.
When making your estate plan, it is important to consider how the person tasked with the duty will be gain control of everything you are leaving behind. Things like tax forms and bank accounts might be identifiable, but what about retirement accounts, stocks, and mortgages or other loans? Is there a clear and up to date list where a personal representative can find what they need?
The process of addressing the financial picture of a lost loved one can be painful and difficult. Making this process simpler and more reliable is one more gift you can leave the people closest to you.