There is one thing that is often left out of an estate plan: You haven't told your spouse or children where to find anything.

Leave a "Road Map" For HeirsPerson Writing on White Book

Drawing up a letter of instruction or a Location List (which we provide in our binders for clients) can spare your family a load of aggravation if you die or become suddenly incapacitated. At the very least, you should list all of your investment accounts, insurance policies, loans, cemetary plot records and real estate holdings. Our binder also provides the names of key contacts. 

Many spouses don't even know where the estate planning documents are. The road map should direct heirs to cancel club memberships and to call current and past employers regarding company benefits. Our binder has a "Trust Assets" section that has financial account statements. 

I know of one couple where the wife asked to see all of the couple's financial records (after the husband retired). They were stacked in piles and boxes in the home office and it took about 12 full days, spread over three months, to sort through everything. 

They placed all relevant documents in a binder that the wife and their four daughters could find easily. They know that if something happens to one or both of them, their daughters can come in, in a painless manner without having to go through all of those boxes.

The Location List can ensure that heirs don't miss out on their inheritance. There was a client (not mine) who had an insurance policy of $500,000. The premium was paid automatically from his bank account. When he had a stroke and could no longer handle his affairs, his children closed the bank account and transferred the funds. The policy was cancelled for nonpayment of premiums. They lost all of the insurance.

Another client's children dutifully paid his nursing home bills for years. When he died, they discovered he had long-term care insurance. The insurer refused to reimburse them because they had missed the claim-filing deadline.

This exercise also serves as a reminder to update documents, such as beneficiary designations on pensions and IRAs. Some accounts have left survivor benefits to an ex-spouse.

Also include funeral instructions and information you would like in your obituary. Our binder has a "Memorial Instructions" section. Our binder serves as the Operating Instructions and the family needs to know where it is. 

Post A Comment