The most common question asked by family members in the event of a death or incapacity of a spouse or parent is, “What do I do and what do I need to have in the way of documents?” The answer to the first question is always dependent upon many facts and circumstances that cannot be addressed without adequate knowledge and information. We recommend to all clients that they place valuable records and information in one location. Often this is a safe deposit box. In some cases, this may be a safe in the home. In other cases, a desk or file cabinet is sufficient. Regardless, it is imperative that family members be told where these items are located to avoid a frantic search. We suggest the following items be assembled and placed together:
- Copy of birth certificates. A certified copy is best.
- Marriage certificates for the benefit of any survivor desiring to claim Social Security or VA benefits.
- A Durable Power of Attorney for Financial Affairs which specifically authorizes gifting to family members.
- A Durable Power of Attorney for Health Care or Medical Directive designating the individual authorized to make medical decisions if you are unable to do so.
- A Living Will giving instructions as to the use or discontinuance of artificial means of life support.
- Your Last Will and Testament and/or Living Trust.
- A list of trusted advisors. This includes your attorney, your CPA or tax preparer, your banker, your life insurance agent, and your financial planner.
- Life insurance policies. A list of all life insurance policies together with the policies themselves and copies of beneficiary designations. Policies that have lapsed or that have been cancelled should be destroyed.
- Long term care insurance policies.
- Disability policies. These are policies that pay in the event of a disability or incapacity to replace lost earnings.
- Prearranged funeral contracts, including funeral instructions as to the funeral home to use, cemetery plots, specific funeral instructions and information to be placed in your obituary. Some clients write their own obituaries in advance.
- A list of retirement accounts with copies of beneficiary designations.
- Income tax returns for at least the previous three years.
- Gift tax returns filed reflecting any prior taxable gifts made to family.
- Deeds to any property you own.
- If anyone owes you money, notes payable to you or other documents evidencing the debt.
- Car/boat/airplane titles.
- A letter of instruction regarding the proper disposition of household furniture, furnishings, and purely personal effects.
- A complete financial statement reflecting your assets and liabilities, including the names of institutions, account numbers, value of asset and amount of any liabilities. We suggest that you update the list every year when you prepare your federal income tax return.
- A listing of individuals to contact in the event of your death, including addresses and phone numbers.
- Premarital Agreement, if applicable.
- Divorce documents.
Items to throw away today:
- Cancelled or lapsed life insurance policies.
- Originals and copies of old Wills which have been replaced.
- Originals and copies of old Powers of Attorney which have been replaced.
- Deeds to real property you no longer own.
- Financial records over 10 years old. Note that we suggest that you keep copies of the actual income tax returns going back from day one. The supporting data can be destroyed after six years.
The benefits to your family in the event of death or incapacity by having these items assembled and put together in a single place is measured in hours or even days of searching through the many things that we collect but never throw away.
Marjorie S. Baker