Organizing important documents for an orderly departure

February 12

It’s depressing to think about your own death, and maybe that’s why so many people don’t make a plan in case of their untimely demise. They don’t organize essential documents or name guardians for their children should a tragic event occur.

But they should: Over the years, I have had countless meetings with clients who lament not having been prepared for an emergency.

The time and effort required to pull this information together is one reason people delay. Other reasons include not wanting to hire a lawyer and indecision about who would be best — and also willing — to raise their children.

However, it is much less emotionally taxing to get this stuff done than it is to worry about not having done it.

So here is a rundown of some of the most important documents you need to make sure your finances are handled properly and your medical wishes are followed.

Last will and testament

Writing a will is understandably a task that people continually delay. But the process often ends up being less difficult than anticipated, especially with the assistance of a good estate attorney. Without a will, you don’t have control over what happens to your finances and minor children in the event of your death. Answers to questions about how to find an estate attorney and how much estate planning documents should cost can be found at wills.about.com. A revocable living trust is also a good option, especially if you don’t have minor children. It allows you to transfer your assets into the ownership of a trust that you control until you die. After, the assets in the trust pass directly to your beneficiaries without going through probate.

Health-care power of attorney and living will

An estate attorney can also help you draw up a durable health-care power of attorney and living will, which are sometimes called “advance directives.” The durable health-care power of attorney will give the person you designate the power to make health-care decisions for you if you can’t make them yourself. A living will explains what type of medical treatment you wish to receive at the end of your life. Online resources can help guide you through the process of creating these documents.

Financial power of attorney

This is the document you use to appoint someone as your agent so they can manage your legal and financial affairs. If you don’t designate an agent and you become disabled, the only way to manage your assets is for a loved one to go to court and get a guardian appointed. This process can be costly and may take months to complete. Here again, seek the advice of an experienced estate lawyer.

Financial information

You will also want to pass along a comprehensive list of financial information to a trusted friend or family member. Financial information includes the name of your bank(s) and the associated account numbers, safe deposit box information (including location and a registered family member who will be able to access the box), a copy of at least your most recent tax return and the names of the firms that hold accounts such as your 401(k), IRA, 529 and pension. Providing a copy of the deed to your home, if you own it, and a copy of the title for your car, if you own one, is also critical. In addition to listing assets, also include paperwork for any debts, such as credit card accounts, mortgage papers and student and car loan information.

Information access

Possibly even more important than having all of these documents in your possession is making sure your loved ones understand the information and know where to find it. “As people increasingly bank online and receive financial statements via e-mail, keeping track of passwords and log-in information has become vital,” says Ed Biggin, an estate attorney at the Law Offices of Evan J. Krame in Rockville. He recommends either storing your digital access list with your estate attorney or using a master password storage account with an online service like www.lastpass.com.

Miscellaneous

Copies of government-issued documents such as marriage licenses and birth certificates should also be among your important papers. If you’re divorced, include a copy of the settlement papers. Your Social Security number and the name of your life insurance company and policy number are also important to pass along.

Last, create a consolidated list of important contacts, such as your financial adviser, lawyer, CPA and insurance representatives and use this as the cover to your completed package of important documents.

Creating, gathering and compiling these documents will probably not be as difficult as you imagine. Give yourself a deadline. Get started and check it off your list. The peace of mind that comes with knowing you have everything in place will make the effort well worth it.

Anzia is a freelance writer and owner of Neatnik. She can be reached at nicole@neatnik.org.

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