18 Sep 2017
Beyond preparing and updating the legal documents in estate planning, people often ask how else they can best organize their estate. Here are seven tips worth your time:
1) Get organized. Keep a binder with a comprehensive list of all of your bank, investment and retirement accounts, your insurance policies and annuities. Include the account number, type of account, name of each owner, the financial institution and contact information, any beneficiaries specifically named within those accounts, and relevant details (for example, maturity dates for bonds or CDs). Include in the binder the year-end statement for each account, and update it every year.
2) Simplify. Do you have accounts at multiple banks, the remnants of an earlier part of your life where you might have earmarked different accounts for different purposes, or taken advantage of competitive interest rates? From an executor’s perspective, dealing with every separate account means another set of forms, proof of her authority, additional visits or mailings to banks to close out accounts and consolidate everything together in an estate account at one bank. If there’s no justifiable reason to maintain accounts at more than two or three banks, then take the initiative and consolidate.
3) Identify valuable property. It’s a challenge for family members to go through a lifetime’s accumulation of property and make decisions concerning furniture, mementos and various collections without knowing whether anything has value beyond the sentimental. Was dad’s stamp collection just a hobby or is there anything valuable in there? Does any of that period-looking furniture have antique value or is it simply old? What about those knick-knacks your great-uncle brought back from his time overseas? Make note of anything of value and what you know about it. Include any relevant paperwork.
4) Write down your passwords. In an online world, it’s easy enough for the average person to occasionally forget their login credentials, but it’s entirely more complicated when a once-capable relative now needs the assistance of their children or power of attorney to conduct their everyday business. Write down your user IDs and passwords and keep the list in a secure place.
5) Gather bills for recurring services. Faced with paying the bills of the estate, your executor needs as much information as possible; keeping a file of bills for recurring services helps avoid surprise and unnecessary expenses. Say for example that you retained an ongoing service to grieve your property taxes, where the grievance is filed each year for successive tax years, and then you are charged a percentage of a successful tax reduction. An executor might sell the house for the estate, not knowing a grievance is about to be filed for another tax cycle. Even though new owners will reap the benefit, the estate may still be responsible for the bill.
6) Identify professionals. Keep a contact list of the professionals you’ve retained, particularly your estate planning attorney and accountant. While your executor is not bound to use them for the estate work, they at least provide a solid starting point and a resource for any needed records.
7) Don’t forget to share. Now that you’ve accomplished these tasks, make sure you tell your power of attorney and executor where they can find all of this information when the time comes.