By Allyn Hughes, CFP®, ChFC®, CLU®, CAP®
Everyone should have an estate binder or folder.
Should you pass away unexpectedly, the last thing your children, executor or Trustee want is to spend hours, if not days or weeks, locating all your assets.
That’s where a $5 binder from the local stationary store can help. This binder, or maybe a file folder box, along with a few well spent hours can simplify the process of getting both information and assets to the next of kin.
An estate binder should hold most of your estate planning documents, and should be:
- Easy to locate. It should be kept in a place that is easy to get to. Or, it should be kept by the person who will be the executor or trustee of your estate.
- Complete. You should include as much information as possible about your wishes.
- Updated regularly. As you make changes to your estate plans, make sure you update the binder.
We recommend that you don’t keep the estate binder in a home safe or bank safe deposit box. It is usually better to keep it in a place where the executor or children can easily get to it. Some of your estate documents might be time sensitive, and it might be difficult for your next of kin to find the keys and get access to the safe or deposit box.
Although not all of these will apply to everyone, here are some of the typical items that might be included in your estate binder or folder:
- Will. Keep the most recent copy of your will and any codicils or additions that have been made to this at the beginning of your binder. This will make it easy for your executor to review instructions for cremation or burial ceremonies. If you have chosen to be buried, please also include proof of burial contracts and payments and contact information for representatives at the cemetery.
- Trust. Trusts are more popular in states with high probate costs.
- A list of your financial accounts. Include the name of the institution, the type of account (e.g., IRA, Roth IRA, checking account), the account number and rough account balances. If you have online access to these accounts, also include a way for your executor to get your login credentials and passwords.
- List of beneficiaries. Include a list of primary and contingent beneficiaries for each of the retirement accounts and annuities (if applicable): IRA, Roth IRA, 401k.
- Life insurance policies. Include copies of recent statements for any life insurance policies that you own.
- Social Security. Provide a copy of your Social Security card.
- Safe deposit access. Include directions on how to get keys to access any safe deposit boxes. Also, provide a list of the contents of the box(es).
- Property ownership. If you own real property, provide title and mortgage information (if necessary) for each parcel.
- Loans and IOUs. List the people or organizations that either owe you money or to whom you owe money. Include a copy of each signed contract or IOU. If still valid, include it in the back of the binder.
- Professionals. Provide contact information for any professionals who you have worked with to manage your estate: estate planning attorney, investment advisor, accountant.
- Business documents. If you owned or currently own a business, provide the contact information for partners or instructions about how the firm should be managed or closed.
Make sure that the right people know that the binder exists. Provide them with specific instructions about its location and the fact that this should only be used after a death.
While creating such a folder may take you a few hours, it could help save your heirs days, if not months. Providing this information can be one of the best gifts you could give to your loved ones.
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