Two Final Touches to Secure Your Legacy

Many estate plans, even the better estate plans drafted by solid attorneys, lack two essential elements. The absence of these features makes life more difficult than it needs to be for loved ones.

I’ve seen many cases of the negative effects of these oversights and was saddened to realize how easily they could have been avoided. Loved ones face more stress and un- certainty than they need to. In the worst cases, the absence of the features can lead to or increase family disharmony. It’s more difficult and time-consum- ing for your executor and successor trustee to complete their jobs and, in some cases, they can’t do their jobs correctly. There will be delays in paying bills, distributing assets and other matters.

Expenses will be higher than they should be, and money often is lost. The first of these overlooked features I used to refer to as the instruction letter, but a letter or something similar really is only the beginning. You need to leave a blueprint of your estate and what should be done with it.

In the simplest case, leave for your spouse a list of whom to con- tact upon your death. The list should include your estate planning attorney, any financial advisors, life insurance companies or agents, banks or other financial services companies and other key contacts. But it’s better to do much more. A list of contacts is only the beginning. Maintain an updated inventory of your assets and liabilities. This should be more detailed than a general list of the assets and their values.

There should be account numbers, recent account statements (or where to find them), any instructions on how to manage assets and any other details that would be helpful. Any debts and details about them also should be listed. Your compilation should in- clude details about Social Security, life insurance, pensions, bank accounts, brokerage accounts, mutual funds and all other assets you own. You also might own special assets, such as a collection, investment real estate, small businesses, or others.

It is important to include details about these assets. A better step is to arrange ahead of time how these assets will be handled (such as by arranging a sale or gift) and stating the details. As I’ve said in the past, an invento- ry of your digital assets is especially important. Digital assets start with your smart phone and email accounts.

They also include any social media accounts, websites you maintain and subscriptions to websites. Financial accounts that can be accessed over the internet must be listed. Don’t forget automatic payments, both direct drafts and charges to a payment card. For all digital assets, include full information. Your executor or others should have all the access information.

I’ve heard of and seen many instances of executors and loved ones struggling to pay bills, manage investments and cancel automatic payments because they didn’t have enough information. For more details about the digital assets, see our April 2022 issue. It is helpful to supplement the inventory with documents, such as recent account statements, income tax returns and your estate planning doc- uments.

Or state where the documents can be accessed. Another helpful section lists your preferences for funeral and memorial services, or a celebration of life.

Most people think they’ve completed this section by stating whether they want to be buried or cremated and a few other preferences. But there should be more. Recently, a couple we know helped a newly widowed friend by accompa- nying her to the funeral home to plan the services and make decisions. After the meeting, the couple realized there are far more decisions and details than they realized. They decided to meet with the funeral home director the next week to plan their own services.

The alternative is to leave the surviv- ing spouse and the children to make decisions in a hurry. A draft obituary or death notice should be included. This blueprint will save time and money, reduce stress and disputes and probably increase the value your heirs get from the estate.

The best of estate plans can be negated or diminished if this information is not readily available. To get started, consider my work- book, To My Heirs: A Book of Final Wishes and Instructions. It’s my best-selling report. You can find more details on the website at www.Retire- mentWatch.com by clicking on “Bob’s Library” under the “About Bob Carl- son” tab. I recently put together a digital version of To My Heirs. This is an Excel spreadsheet with multiple tabs that makes it easy to keep the information well-organized and easy to find and update. Look for it on the website near To My Heirs.

The other forgotten estate plan ele- ment has several names, including eth- ical will, family love letter, legacy letter, heritage will and more. This isn’t a legal document. It is an attempt to pass on values, philosophy, final thoughts, family history and other insights. Some people simply want to make a final expression of love and gratitude to family members and perhaps other loved ones. Traditionally, these documents are letters. But with technology you can speak directly to loved ones through an audio or video recording.

You can create a slide show or movie. Whatever name you want to give it or format you want to use, this is an excellent final gift to leave loved ones in addition to giving yourself a little bit of immortality. For more details about family love letters and ethical wills, see the December 2021 issue of Retirement Watch.