The Book - Gathering Important Financial Documents

Christopher D. Flis |

For anyone who has ever been involved with settling an Estate after a loved one's passing, you are all too familiar with how cumbersome that process is, even if ALL the paperwork is in place.  For those who have not been involved in disorganized Estate settling, consider yourselves lucky, I mean very lucky.

In Estate settling, when proper paperwork either does not exist or cannot be found (or accessed), the potholes grow ever larger and the roadblocks multiply quickly.  The good news is that this conundrum is mostly avoidable with a bit of planning.  The result of this planning, ideally, is "The Book" containing all one's relevant papers along with a secure online archive in case the "The Book" is damaged or misplaced.

Let's review some items your book might contain:

1)  Estate Documents

Estate Planning is an essential component of nearly everyone's financial plan.  Drafting the documents is only the first part.  Proper storage is the next, and more important, part.  The actual documents an individual will need will vary from person to person; however, here are a few of the more common ones:

(i)    Will

(ii)   Medical Directives

(iii)  Power of Attorney

(iv)  Health Care Power of Attorney

(v)   Trust Documents

Please refer to a legal professional for how these documents may apply to you and to have them drafted and executed for you.  If you are a single parent with minor children, stop reading and call an attorney immediately!

2) Beneficiary Designations

Both Retirement Accounts (both Employer Provided and IRAs) Sponsors and Life Insurance Companies provide individual account holders the opportunity to name his/her Beneficiaries.  It is critical for account holders to know to whom they are bequeathing their hard-earned retirement money.  Moreover, the designations ought to be reviewed annually to avoid unwanted hiccups, i.e. an ex-spouse inheriting a windfall instead of a current spouse.

Account holders for "regular" accounts (Banks Savings Accounts or Taxable Brokerage Accounts) can also designate account to "Transfer on Death".  If an account holder elects this option, keep a copy of this documentation for Estate Settling.

3) Life Insurance Information

When you enter into a Life Insurance contract, the Life Insurance company provides, among other things, a Certificate (or form) detailing the term of the contract, the policy number, and other relevant data.  Keep this information so when your Executor makes a claim, he/she has the necessary information to provide the insurance company.  Also, if your beneficiary designations are incomplete - no Dates of Birth or Social Security Numbers for beneficiaries - you can always submit an updated Beneficiary Designation so it is as complete as possible and there are minimal ambiguities.

4) Social Security Statements

While not the most important document, for those married couples out there, there is a lot of information contained in a Social Security Statement that may be useful for future Financial Planning.  Of course, the Social Security Administration will have the same information when a claim is ultimately made; however, this is a nice document to add to a properly constructed "Book"

5) Birth Certificate

You never know when you are going to need certain documents....I can provide some odd stories if you like.  Trust me on this one, get 3 certified copies of your Birth Certificate and put them in The will not regret doing it.

6) Marriage Certificate(s)

This is a frequently overlooked item.  The easy answer is to make a copy of it and put it in The Book.  The longer answer is for those who have previous divorces and you may need to prove you were married for a certain period of time or that you were married at all.  Get this now and put it in The Book and call it done.

7) Divorce Papers

While Divorce Settlements are typically final, you never know.  And the last thing you want an Executor to deal with is an ex-Spouse contesting something to do with your divorce. or Estate.  Obviously there are public records you can request.  However, maybe it is best to just have copies of the relevant paperwork to save some hassle later.

8) A List of Your Accounts

It is amazing to me how many times during data gathering that I have had a Client remember (or find) an account long since forgotten - think orphan 401(k) accounts.  The way to avoid this is to be organized and know what is where.  The graduate-level answer is to document what accounts you have, the account numbers, and who has custody of the asset(s).  That way, your Executor knows who to call when settling your affairs.  You worked hard for your money, so make sure it goes where you want it. And please do not forget about Credit Card Numbers, Cell Phone Accounts, Frequent Flyer Accounts, and it pains me to say - your Costco Membership...I love Costco, but we spend too much there sometimes!

9) A List of Important Contacts

For an Executor, knowing who your Accountant, Attorney, Insurance Agent, and Financial Planner are is pure gold.  Assuming you have been regularly using these professionals, they will collectively know all about your affairs and can provide invaluable assistance with settling your Estate.  Moreover, given that planning for a Client's passing is part of what they do, they will be able to take part of the emotion out of the process, which again is beneficial to your Executor, who is likely to be a close family member.

10) Other Important Papers

This is a catch-all for the unique situation that applies to you.  For example, Military Members will want to have a copy of his/her DD-214, Military Awards, and any VA Disability Information.  Those in other professions like attorneys or doctors may Buy/Sell Agreements that pertain to their practice or firm.  And don't forget any important religious papers - for example, Baptismal Certificates...Not every item has to have a financial purpose.  Think about this Tab quite a bit...remember, your Executor has to wind up all your affairs, so help him/her out by capturing all the details.

11) Digital Assets

There are entire White Papers that have been done on Digital Assets alone.  Suffice it to say, most people likely have multiple Social Media accounts, e-mail accounts, and other digital subscriptions (NetFlix, Amazon Prime, and iTunes come to mind).  It is worth the time to consider how you want these accounts handled and then do as much as you can now.  Most providers allow a good bit of leeway for you to direct how your account is handled.  Obviously, your wishes have to be made known before your passing.  Digital Assets are an area you may want to spend a bit of time figuring out what you would like to do once you pass away.

Capturing all your relevant data obviously requires a good amount of effort.  Fortunately, there is typically time to do it if you break it down into bite-sized chunks...putting one foot in front of the other will ultimately result in a cogent set of material for your Executor to use when crafting your legacy.

The picture above is an actual Book containing much of what was previously described.  While not perfect, it is a great start.  Even better, reviewing and editing it is far simpler than the original construction process.  Yours need not be as formal as the one's your Book, make it what you want your heirs to remember of you.