May 2015

QUARTERLY INSIGHTS FOR CLIENTS: Are Your Family and Loved Ones Prepared To Carry Out Your Estate Plan?


It’s a pretty safe bet that you don’t enjoy the paperwork of your life, so it’s not hard to imagine the difficult and frustrating task of coming to it “cold”:  think about the problems to be faced by the person you have charged with dealing with your financial and legal matters if you become  incapacitated during your lifetime or after your death.   Whether that person is a family member, a friend, a trust company or a professional fiduciary  (a “successor” for purposes of this article), he or she will likely be in unfamiliar territory.

Unfortunately, it is not enough for you to have carefully prepared and signed all of your estate planning documents.  You need to take additional steps to organize the information your successor will need so that he or she can efficiently function, and to make sure your successor can find that information.  (Those charged with making health care decisions for you similarly need to know the location and contents of your advance health care directive, but that is another discussion).

Consider the following issues (not an exhaustive list, just an illustrative one):

  • No Will or Trust can be located at death or no Durable Power of Attorney at disability:   Without these documents, there is no easy way to establish who has authority over your assets.  There are many situations where being able to act promptly is critical both during your lifetime and following your death.  What if immediate access to funds is needed for your care during your lifetime or for funeral arrangements and debt payment at your death?  What if the stock market is dropping precipitously and being able to sell stock is important?  (At death, there are additional considerations, for example, your successor will need to know the beneficiary(ies) you have selected).
  • There is no list of professional advisors:   Your attorney, accountant, investment advisor, insurance professional (and possibly other advisors) will all have important information for your successor, so your successor should know who they are and how to contact them.  For example, your successor may need to deal with your accountant immediately in order to avoid interest and penalties if tax returns or tax payments are due.
  • No access to online information:  The financial and legal information that you store in your computer or in the cloud may not be retrievable without current passwords. Your successor should know how to locate a list of current passwords.  This is critically important not only to retrieve stored documents such as copies of estate planning documents or account statements, but also to retrieve current information which may arrive via email (bills, for example).
  • There is no insurance policy with your papers:  Insurance companies have no obligation to monitor the death or health of an insured; it is up to the policy beneficiary to make a claim.  If no one knows about a life insurance policy, no one will claim the insurance proceeds at your death.  Similarly, if no one knows about disability or long term care benefits during your lifetime, these benefits may not be claimed.
  • Funeral arrangements:  Your successor should be able to find any paperwork related to your preferred funeral arrangements.  This is not only important in terms of securing what you want and reducing the possibility of others fighting over what should be done, but also in avoiding the possibility of double-paying if you have prepaid funeral arrangements.
  • Contact information of family and friends:  Who should be notified of your death?  Your successor might – but might not – know the family and friends who should be informed of your death.  Keeping a list of contacts available for your successor can be helpful for this purpose.
  • Assets and liabilities:  If your successor doesn’t know about an asset, he or she cannot manage it effectively or distribute it to your beneficiaries at your death.  An overlooked asset will likely escheat to the State after a period of inactivity.  If your successor doesn’t know about a liability, additional interest and penalties may have to be paid.

With that as background, we recommend that necessary information be collected in one place (in a binder, for example, or in one computer file) so that your successor can easily find it.  In fact, it would be a good idea to go over this information with your successor from time to time and show him/her where you keep it.  And don’t do this once and forget it:  make sure the information is updated periodically.

Click the VIEW link below for the checklist we have created to assist you with this organizing. If we can provide further assistance with organizing, please let us know.