Developing & sharing your legacy plan
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Too often individuals pass away before sharing personal information with spouse, children, other trusted individuals, and/or the individual settling their estate, which can complicate the estate settlement process. Losing a loved one is difficult and having time to grieve is necessary for the healing process. That’s why it’s so important to educate another about what you have and what you want to happen should you fall ill or pass away while you can.
Not all individuals are the same, so keep your family and others who may be involved in your estate plan in mind as you read on. Consider their ability to respect the information you share and be responsible with what they learn. It’s up to you as to how you approach the conversation when you’re ready.
First Things First
Create a folder that contains the following information and store it in a secure place that only a trusted individual is privy to.
- A net worth statement that identifies all your assets and liabilities, with or without financial detail.
- The location of real estate, other land, bank accounts, investment accounts, valuables, etc. and identifying debt holders (mortgage, credit card, auto loan, etc.) is also important.
- Ownership of the assets/liabilities and account numbers must be documented as well.
- All websites and applications that you use: social media, streaming, investment, banking, medical/dental, retail, etc.
- A list of your passwords: for all sites and apps noted above, as well as computer and phone log-ins, etc. If you have these saved in your computer, make sure you password protect the document…and store that password elsewhere.
- The location of your last will and testament (and trust documents if you have), as well as your incapacity documents (living will, appointment of healthcare representative and financial power of attorney) (if not included in the recommended folder).
- All insurance policies.
- A list of all professional advisors and medical professionals, including their contact information.
- Your current prescriptions and the pharmacy that you use.
- Wishes for your care if you are no longer able to care for yourself (care at home, name of assisted living facility you prefer, individuals, etc.).
- The location of your safe deposit box and the key.
- A list of bills that are on autopay.
- Prepaid funeral and/or burial detail.
- You may also consider including your wishes for your funeral/celebration of life.
The location of your folder/information doesn’t need to be shared right away, but it’s good to have it in order. Review the information annually to keep it current.
When to Share
It’s important to keep spouse informed of all the above information.
Children: When children become independent and show signs of responsibility.
Executor of Estate: When your will is executed, notify your named executor and successor executor(s) of their appointment. (It’s a good idea to let them know of your intentions of naming them executor when drafting your will to ensure they’re willing and able to act.).
Trustee of Trust: It is best to talk with the individual trustee or trust company regarding your intent to name them trustee before executing the legal document. If they agree to act in this capacity, confirm your appointment at the time your document is created.
What to Share
Spouse: At a minimum, the net worth statement and information regarding assets and liabilities, account ownership, the terms of your estate and incapacity documents, list of advisors/medical professionals, and current prescriptions. The location of your folder with all additional information is also recommended.
Children: If a child has a role in your estate settlement, health care or financial decisions, let them know this immediately. Letting that child know the location of the pertinent legal documents and other information is also recommended. Talking with children generally about your estate is a good idea; however, if you own a business, investment real estate or other non-traditional asset(s), it’s pertinent that you discuss this with your children and share your wishes for those assets when you’re gone. Your children should know if you have long-term care insurance (or not) as well as life insurance. You may also communicate your wishes for care, funeral and burial/cremation when appropriate.
Executor: A copy of your last will and testament and the location of pertinent information needed to settle your estate (net worth statement, contact information for advisors, etc.) Again, if your estate is non-traditional, share information about those assets that will require additional work.
Trustee: A copy of the trust document for which this individual will be responsible, information regarding assets held in the trust, a list of advisors and contact information, and anything else that’s relevant for trustee duties.
Financial Power of Attorney: An original power of attorney document, and a general overview of bank and investment accounts, debt obligations, the list of financial advisors and institutions, and the location of additional information necessary to carry out the duties of POA.
Healthcare Representative: An original health care representative appointment document, and the location of additional information necessary to fulfill duties related to your health (healthcare providers and prescription information, copy of long-term care insurance policy, health insurance detail, etc.).
Is a Meeting with Children Helpful?
Yes. Talking through your net worth statement and wishes for your legacy after you’re gone is ideal. If you’re okay financially and you don’t want to share “numbers,” let them know you’re “okay” and that they don’t need to worry about your financial needs. If they stand to inherit a substantial amount of wealth, it’s very important to let them know this at a time you feel appropriate. This can be a concern for many, but it’s best to share this with them when you’re healthy and able to mentor them with the financial responsibility that comes along with it. Having these conversations should bring peace of mind knowing that your legacy will continue beyond your years.
Summary
Gathering and organizing the suggested information for trusted individuals should allow you to sleep better at night. Before it’s too late, talk with those that will have a role in your estate settlement, care and/or legacy so they can sleep better at night too.
Kathy Hower, CFP, is a Senior Wealth Advisor with Bedel Financial Consulting Inc., a wealth management firm located in Indianapolis. For more information, visit their website at www.bedelfinancial.com or email Kathy at khower@bedelfinancial.com.