Prepare your estate
In December and January, The Simple Dollar is posting a daily series focusing on specific activities you can do right now to set the stage for a great 2011. Out with the old, in with the new.
Prepare your will and your master information document.
If you have no dependents, no descendents, and no one who would value having any of the items you possess, you can skip this one.
If any of the above applies to you, though, pay attention. The worst thing you can do to the people you care about is die suddenly with no sort of estate plan left behind and no indication of what and where all of your accounts are. Not only is your family grieving, but they’re left to deal with confusion in figuring out where all of your accounts are, talking to a lawyer about intestacy, and hoping that a judge can resolve things reasonably.
You don’t want that, not if you care for those that you leave behind. I’ve watched it happen before and, to put it simply, it’s a depressing mess.
The minimum I would suggest for anyone in terms of an estate plan is a will and a master information document. Let’s address these in order.
A will A will is simply a document stating what you wish to happen to your property and assets should you pass away. This usually handles everything for small estates; if you’re not a millionaire, a will should handle everything you need.
I do not recommend using a software program to prepare your final estate. It’s a great tool for getting your ideas in order and ensuring that you have everything taken care of, but get your final will checked over by a lawyer who can make sure that it’s legally binding in your area. I would also make sure that your executor, whoever you designate that to be, has a copy.
Get it done. You won’t regret it.
A master information document Hand in hand with a will, in my opinion, is a master information document, something I discussed in detail a while back.
Essentially, a master information document outlines all of your account information and other information someone would need to know about in the event of your passing. Much of this information will be highly private, so you want to make sure that when you prepare such a document, you store it in a secure place and let only the most trusted people know where it is.
Having such a document can be incredibly valuable in the event of sudden death, as it makes it very easy for your survivors to close out accounts and so forth instead of having to hunt for information. Rather than digging through mountains of statements, they can just simply refer to your document and have all of their concerns well in hand.
Other things to consider While you’re at it, you may want to consider some other items.
An advance health care directive states your wishes with regards to medical procedures intended to prolong your life in medical situations where you are incapable of making such a decision for yourself. I have ceded all such choices to my wife, but many people may want to have control over such decisions.
A durable power of attorney states who you wish to make legal decisions on your behalf if you are similarly incapacitated.
If you have a large estate, there are many other options to consider. I would strongly encourage you, if you have a net worth in excess of one million dollars, to consult a lawyer with regards to estate planning.
In any case, you owe it to the people you love to take some time to get these pieces in place. No one likes to think about their own mortality, but when you don’t think about it, you push that burden off onto the people you love at the very moment when they could really use your helping hand.
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