Estate planning is a process that addresses issues that are legal, financial, emotional and practical. The legal side of planning encompasses documents such as Wills, Powers of Attorney and Advance Health Care Directives. These legal documents are by far the most important part of any estate plan and should be the primary focus of the planning process.
That said, even an estate with well-drafted legal documents can prove difficult to administer if the Personal Representative does not have access to the estate planning documents or information regarding the assets of the estate. In light of these common challenges, we suggest two practical steps that one can take to help ensure an effective estate plan:
1. Location of Your Documents. If you have estate planning documents, please make sure that your loved ones can find them when the need arises. On more than one occasion in my career, I have had individuals call my office to see if I did a Will for their loved one. They said they believed there was a Will, but could not find one, so they were calling attorneys hoping to get lucky. That is a terribly inefficient way to ensure one’s wishes are followed after death.
Tip: We do not recommend sharing copies of your documents with your loved ones (as it could cause confusion with later updates), but rather keeping them in a location at your home and placing copies with two trusted advisors (e.g., your attorney, CPA or financial planner). You can then leave directions for your family to contact one of these advisors if they are not able to find the documents.
2. Your Assets. It is hard to administer an estate or take control of a disabled person’s assets if you are not aware of where those assets are located. It is important to leave a list of financial assets (account numbers, bank location, etc.) for your agent or Personal Representative to use as a guide if the need arises. We have worked with Personal Representatives who were “playing detective” when it came to tracking down financial assets or simply had to go through piles of paperwork trying to locate relevant financial information.
Tip: We offer a free personal record book on our website. This resource is an excellent tool should one need to assume responsibility for your personal financial affairs. It is comprehensive, but can be daunting if you try to complete it in one sitting. My wife and I have made a pledge to work on our personal record book for 10 minutes at least once a month. Eventually it will be complete, but any little information we add to it in the meantime will certainly help our loved ones in the future.
Paying attention to the practical side of estate planning can provide a tremendous benefit for your loved ones and ensure that your estate planning documents work to their fullest potential when the need arises.