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The week before my mother hosts a big family holiday dinner, she begins preparing. She finds all the recipes, takes an inventory of her kitchen, makes her grocery list. She even practices setting the table using her favorite decorations and dishes. I always tease her relentlessly for all the preparation; however, on the day of the meal, she is cool, calm, and collected. On the other hand, when I host a family get-together, chaos reigns supreme. Do you know the same can be true for your estate plan?
You can have top-notch estate documents written by the best attorneys, but the documents are worthless if no one can find them. Also, locating account information, usernames and passwords, and other important documents can become unnecessarily complicated. But there is good news: you can get in front of these challenges with a little thoughtful planning.
Your Estate Planning Fire Drill
Periodically conduct an “estate planning fire drill” to make sure execution of your plan goes as smoothly as possible. Some points to consider:
- Double check the key players (personal representative, power of attorney, health care power of attorney, trustee) to confirm they are still the correct people to implement your plan. Confirm that the key players:
- Know how to (and who can) access your documents. Do they know the combination to your safe? Do they have authority to access the lock box at your bank?
- Understand your wishes.
- Know how to contact your insurance, tax, financial, and legal advisors as well as your doctors.
- Have access to your health, life, disability, and long-term care insurance information.
- Have access to your key documents such as marriage or birth certificates, passport, and driver’s license.
- Know or have access to the details of your finances. A power of attorney or personal representative will need to know about all of your bank accounts, investment accounts, credit cards, outstanding debt, and insurance information. Consider creating a financial statement detailing all your accounts and regular cash flows.
- Review beneficiary designations on retirement accounts and insurance policies to ensure payments go to the correct people.
- Examine the titling of accounts. If you have a revocable trust, you may want to retitle assets to your trust in order to avoid probate. If you have joint accounts or accounts that are payable on death, double-check the details to ensure things are correct.
- Make sure the appropriate people have access to your passwords, email, cell phone, social media, and online accounts.
- If you have funeral or burial wishes, be sure the correct people have access to these documents.
Frequently, the fire drill reveals a gap in communication or a way to make things simpler. You may want to have a conversation with your advisors so that they can be prepared to help your loved ones implement the plan in the event something were to happen to you.
