As we all get older we need to think about some estate planning issues. Since we are all retired and have nothing to do, I have a little project for you....create a "dead file".
Early in my career I became very good friends with a coworker of mine. At work one day Mike had a document in his hand and made mention of adding it to his "dead file". I was curious about this "dead file" and asked him what he was talking about. He said he had made a file folder that contained a variety of information for his wife to refer to when he was dead. He thought he was real funny by naming it the "dead file". I was in my 20's at the time and didn't see what the big deal was. Later in life I saw the value of a "dead file". Mike passed away unexpectedly at the early age of 51 and I'm sure he left a detailed "dead file" behind for his wife.
In most marriages or relationships there is one person that handles the finances and day to day aspect of keeping the lights on. This person is usually the planner of the two and is more detail oriented. I am that person in my house. I handle the utilities, insurance, investments, streaming subscriptions, etc. Even though I have offered the management of these duties to my wife, she has declined many times. She would prefer that the light turns on when she flips the switch, the house and car are insured, Netflix works and money is in the bank without knowing how the Wizard behind the curtain operates it all.
The problem with this scenario is if the "Wizard" dies without leaving an instruction manual to operate the buttons and levers. Several years ago I created my own "dead file". This simple manilla folder contains a sheet of paper with information about everything I could think of that she may not know the details about. It begins with information on our life insurance and where the documents are located. Home information includes the details of what company has the mortgage and what company handles the insurance. Next is info on our cars including where the titles are located, insurance and any loans against them. Next up is where our important documents are located including birth certificates, marriage certificate, passports, etc. I have them all in one place and want to be sure they can be found by accessing the "dead file". The next item on my list is a list of all financial accounts and where they are located. Next is health insurance info and then info on who to contact on my retirement pension to seek survivor benefits. I have also included info on actions to be taken to access my 401K funds.
My "dead file" also has small things in it such as the combination for my gun safe and the combination for the lock on an outside gate. The file has the location of keys to our outdoor shed. The file also tells where a list of passwords is kept for all online accounts. I tried to include everything that I know her or my kids would not know the details about or think about while dealing with by passing. I included a line on who our utilities are with and about our auto toll pass account. There are so many little details that need to be known to make life easier on the surviving spouse or children.
While writing this post, I noticed my "dead file" is dated 2020. So, I need to update it soon and add any new details or accounts. Updating the dead file should be a frequent event so put it on your New Year's list of things to do every year. Your "dead file" could contain anything you want it to. When my dad passed away in 1993, he left a hand written letter in which he spelled out a few of his wishes. Your file could contain a one page document with info similar to what I have talked about here or it could be inches thick and contain all the reference documents needed. You should include your will and any other end of life documents. If not previously discussed, it should include any burial or cremation wishes you may have. You could include a letter to your family or reveal family secrets or buried treasure or who gets the dog. Make your file whatever you want it to be. My "dead file" is in a larger plastic file box that also contains folders for life insurance and retirement that I refer to in the "dead file".
I know this is one of those conversations that is sometimes difficult to think about. But, after going through the death of my mother about two years ago, I know it is difficult to figure out those things listed above when account statements, bills, etc. are scattered about a desk or a room. My mother's bills and finances were pretty simple but there were some surprise accounts that I didn't know about until I found an old credit card or a new statement came in the mail. While dealing with mom's estate I learned a few things that I need to add to my file as tips or suggestions and I will share them here. Order many copies of the death certificate as they are needed many times when trying to access financial accounts or to close accounts. Also, remember there is a death benefit from Social Security. It is small and something like $250 but remember to file for it. I went through mom's bills and statements and quickly settled and cancelled all credit cards and subscriptions. Most had balances of $0 or small amounts like $25-50 for her most current purchases.
Who is the "Wizard" in your relationship? Do you already have a "dead file"? If so, what does it contain? Do you have any other suggestions on what the file should have in it? Do you have any tips or suggestions for others when dealing with an estate after someone dies?
Please don't procrastinate on this project that I have assigned you. If you are the "Wizard" in your relationship, you have an obligation to write out an instruction manual for those you may leave behind. If you work on your "dead file" and can't figure out what to do with all your money, please include this statement in the file "Send Mitch, at Retirement Coffee Shop, a large amount of money"! But please, don't leave me any pets!