One of the primary reasons that folks go through the estate planning process is to take care of and protect their family.
After your death, you likely want your family to be able to grieve without having to worry about where your important estate planning documents are or how to pay for your funeral. That is why I’ve gathered a number of recommendations from an article in the Huffington Post on making things easier for your survivors.
The Huffington Post advises creating a file for your estate plan, storing it, and making back-up copies. In this file, you should include not only your estate planning documents but also your real estate records, financial records, organ donation wishes, and other paperwork.
Making sure that all estate planning documents are organized is something I strongly recommend to all of my clients. This is a crucial part of estate planning that is too often overlooked. In my twenty-five years of practice, I’ve found that folks frequently lose track of their documents, which makes it much harder on their family.
To help our clients and their families avoid needless frustration and worry, we work with them to organize everything. We give every client a red notebook, complete with a table of contents and numbered and color-coded tabs, to hold all of their documents. We tell our clients to keep this notebook on their bookshelf so that it will be safe in their home but easily found if they never tell anyone where their documents are.
The article in the Huffington Post also recommends other actions. Some we agree with; others we do not, but all of these steps are worth reviewing:
Name your executors. An executor is the person you give the responsibility of handling your estate. This person will need to settle your financial affairs, including paying your debts, distributing your assets, and dealing with probate. You should choose someone you trust as your executor, whether that is your spouse, a child, a family member, or a close friend. It’s also important to choose an alternate executor in case your first choice is unable to perform the executor’s duties. At Lovett & House, we help our clients go through this process to choose an executor they trust. For clients whose estate planning needs are best addressed by a trust, this person would be the successor trustee for your trust.
The Huffington Post suggests you make your executor a co-signer on your financial accounts. The idea is that this person could immediately access money to pay for your funeral and other expenses that may come up during probate. We do not recommend you do this. If the bank mistakenly makes this person a co-owner of the account, then your family may lose the funds, or if this new co-owner gets sued, then the money in your account may be lost. Most funeral homes will not insist on immediate payment as long as suitable arrangements are made. Further, we can normally get access to funds fairly quickly.
The Huffington Post also recommends you rent a safety deposit box to store your estate planning documents. In the unlikely event that your place of residence burns down, your documents, so this theory goes, would be protected in a safe deposit box. Once again, we disagree with this advice. The problem is that your executor should have the key to the box or should at least know where it is kept. In our experience, this rarely happens. Many times, the key gets lost or the trusted person forgets which bank is involved. This is why, at our firm, we send our clients home with a complete set of original documents and we keep scanned electronic copies for our clients should they ever need us to email documents to a child or trusted advisor.
Determining your organ donation wishes is important. This decision should be recorded in writing, and you should let your family know your wishes. We handle this matter for our clients in their living wills.
Making funeral decisions is important, too. When estate planning, you should determine how you will like your funeral to be arranged. Do you want to be cremated or buried? Would you prefer a formal funeral or something more in keeping with your family’s traditions? Again, it is important to communicate these wishes to your family. We go a step further and recommend our clients pre-pay their funerals so that this matter is addressed now. It spares the family a lot of heartache and locks in the costs at today’s prices.
Although Huffington Post recommends you buy a grave site if you would like to be buried, we say “Not so fast!” If you want to pre-pay for arrangements, we suggest you build in this cost in the overall pre-paid funeral plan. If you buy a particular plot, and later on you do not want to use it, then these are very difficult to sell.
By making sure that your estate plan is complete, up to date, and organized, you can minimize the stress and heartache of settling your affairs. If you have questions about the estate planning process or how to organize your estate planning documents, please don’t hesitate to contact our office.