Prepare your legacy information. Here's how.
Don't just leave a legacy. Leave your legacy information in order.
About a year ago, I wrote an article entitled Preparing Your Information for Disaster, in which I discussed the challenges my mother (and I, in a peripheral way) had in organizing the accounts and papers of my maternal grandmother after she passed away.
The article is really thorough and I consider it to be one of the most essential things I’ve ever written for The Simple Dollar. Simply put, if you have someone you’re going to leave behind, you need to prepare a document to help them figure out the mess of your accounts.
So why am I touching on this topic again? Well, because the issue has come up again in my life.
For the last year or so, I’ve served on the investment committee of my local church. Much of the money that is donated to our church is passed on to other charities, like the local food pantry and ELCA World Hunger and such things – sometimes even directly in the pocket of people in the community who are struggling to keep food on the table for their kids. I’m extremely proud of the charitable giving that we do – in fact, the charitable giving of my church in the local community and in the broader global community is the biggest reason why I’m an active member.
Anyway, we do retain some of the money for things like helping members of the church attend seminary, pay for building repairs (and eventual building replacements), and so on. I also find these things important, again, because they support the community – weddings are hosted there, people freely congregate there, and so on.
Of course, with money in the bank, someone has to be in charge of investment decisions. Our church has a three person volunteer investment committee in place, with a chair that does most of the footwork and the other two largely contributing on the decision-making process. Given that I write The Simple Dollar, it’s probably no surprise to anyone that I’m on this committee.
The chairman of the committee for many years passed away very recently, leaving a big vacancy in terms of who would actually handle the footwork of preparing reports and so on. I chose to volunteer for this, believing that I could easily pick up the reins and run with it.
What I found was that taking over the reins was a lot harder than I had ever anticipated. I’ve spent lots of hours already piecing through the papers and the statements, attempting to clearly discern where things should be and which account is intended for which purpose.
All of the pieces are there (aside from a few small arithmetic errors), but it’s akin to popping open a 1,000 piece jigsaw puzzle with all of the pieces loose in the box. It takes some serious work to assemble them into a clear picture.
Which brings me to my point.
All of us are responsible for our own finances. Some of us are responsible for the finances of others, either through volunteer work (check), parenting (check), or guardianship (thankfully, no check).
What happens when you’re no longer capable of managing those finances? Usually, someone has to come in, figure out everything from whatever you’ve left behind, and still often miss some things. A lot of time and effort and energy is wasted simply trying to figure out what was in your head after you can no longer reveal it.
The solution is simple: document it.
My previous article outlined an extremely thorough document that you can prepare to make sure everything is easily accessible. Honestly, though, most people won’t put in the effort to do that, though it will make things much, much easier for those they leave behind if they do.
Instead, I propose leaving behind a single page of explanation for each relevant person you’re going to leave behind.
You’re leaving behind a spouse? Prepare a page or two explaining everything she needs to know.
You’re leaving behind kids? Prepare a page telling them everything that’s important and relevant to them.
You’re leaving behind fiduciary responsibility? Assemble a page explaining the accounts, who to contact about the accounts, and what they’re all for.
It doesn’t have to be endlessly thorough (though the more thorough and well-organized it is, the easier it will be for those you leave behind to pick up the reins). It just needs to have enough information so that the people you leave behind aren’t completely lost, aren’t missing responsibilities that might hurt them if left untended, and aren’t failing to claim the resources you’ve left behind for them.
Make it clear. It only takes a few hours and it’ll save a lot of heartache down the road.
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