Sorting it all out amid the grieving process can be doubly daunting. Is there a trust or even a will? Where did Mom want to be buried or cremated? What happened to Dad's military pension? Who's their attorney? Where are their bank accounts?
It doesn't need to be that way.
To avoid the financial and emotional chaos, a number of families and money-management professionals rely on a one-stop system: a document, a binder -- even a single desk drawer -- that contains all the financial paperwork we inevitably leave behind.
The documentation should cover your financial life, everything from an inventory of your stocks, bonds and IRAs to insurance policies and military pensions, even your airline frequent flier miles.
You can also include specific details such as what you want written in your obituary, who should take your pets and where you've hidden the key to the safe-deposit box.
For most parents, the goal "is to make it as painless as possible for their children," said Sacramento estate planning attorney Trudy Nearn. "By getting it all in one place, they get their kids ready to take over."
And it can go far beyond monetary possessions.
"It's not only what's in your bank account, but what's in your heart," said Donna Pagano, a certified financial planner and co-author of the "Family Love Letter," (www.familyloveletter.com), a financial planning booklet that includes sections to jot down your family history and remembrances.
The Family Love Letter even includes space to insert the inscription you want on your tombstone and who you don't want at your memorial service.
The process of sorting and documenting your financial life can ward off potential problems and yield unexpected benefits.
For instance, without a list of magazine or satellite radio subscriptions, those contracts could continue dinging bank or credit card accounts for months after you're gone.
Pagano knows a woman who discovered her mother had inadvertently renewed numerous magazine subscriptions through 2020. After her mother's death, she called and got nearly $1,000 refunded.
It also can be a good time to double-check details, such as whether the correct beneficiaries are on your life insurance or pension accounts.
While filling out the paperwork can feel tedious, it doesn't have to be exhaustive. You can take shortcuts, like putting all your credit cards -- front and back -- on a copier. Or compiling the inventory on your computer and storing it on a memory stick.
To ensure that your financial documents or file folders don't wind up in the wrong hands, it's best to keep them in a safe or a locked, fireproof filing cabinet. Tell a trusted friend or family member where to find the key or combination.
"Women think about the emotional side of making sure it gets done right," said Rashida Lilani, a certified financial planner. "Moms know their children are busy and want to make it easier. It's another act of love."
Financial planner Dave Ramsey lists 11 essentials:
1. Cover letter: Nothing fancy, just a single letter to introduce loved ones to the drawer's contents.
2. Will or trust: Copies of your will or trust, including names of the executor and person with power of attorney.
3. Financial accounts: List anything in your name, including account numbers and amounts. This includes credit card, bank, retirement accounts.
4. Funeral plans: All instructions should be noted so family can fulfill your wishes. If married, include both spouses' wishes.
5. Insurance policies: List all health, life, auto, homeowners' policies. Include who is covered, policy numbers and contact information.
6. Vital documents: Include birth certificates, divorce papers, military and Social Security records, car and boat titles, mortgages and property deeds.
7. Legacy letters: Since the intent is to guide your family after you're gone, include personal notes or letters to loved ones.
8. Monthly budget: Add a copy of your budget, including bills to pay.
9. Tax returns: In case of an IRS audit, your state and federal tax returns can be like an insurance policy.
10. Safe-deposit box: Indicate where it is and who has access. As backup, keep a copy in your box of the legacy drawer's contents.
11. Passwords: Write down all passwords, user names and PIN numbers so family can access computer, cellphone and financial accounts.
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