HOW TO: ORGANIZE YOUR MOST IMPORTANT DOCUMENTS
Updated: Jun 16, 2021
No one likes to talk about being prepared for the worst-case scenario. Unfortunately, due to the current COVID 19 pandemic, it’s hard not to have difficult conversations about estate planning and really considering if your affairs are not only in order but ORGANIZED. I know it’s not a pleasant conversation to have. I hope that in sharing my personal experience, as well as my expertise as a professional organizer, I can nudge you down the road to consolidating and organizing all these important documents in one place.
Let’s talk about important documentation and why and how they should be organized.
While I am not a lawyer, financial advisor, CPA, banker or insurance agent I am fortunate to have friends that are; some of whom lend their expertise in this article. I do have personal experience with being both an executor and a power of attorney; I am shared executor for my Mother passed from cancer last July and I also share POA of my father who has dementia. I found out that I was executor when my Mother entered hospice care, as you can imagine I did not have the tools or information I needed to settle my Mothers estate with ease. In both situations their diagnoses were a surprise and happened far sooner in life than most of us would expect it. Here’s WHY you should have your important documents organized and centralized:
1) You know how to find them when you need them. Your executors and POA’s should also know and have the ability to access these.
2) You can safely protect them in a secure location in your home. (I.e. fire proof safe and/ or secure mobile app, encrypted flash drive, etc.). This reduces the possibility that they may be lost in a natural disaster or house fire.
3) If there is a need to evacuate your home quickly, these documents can easily be located and taken with you.
4) In the event of your passing or sudden decline of your health:
a. Your partner would have all the information required to run the household.
b. Your family and executors would have clear, no drama, peace of mind instructions on how you want your estate settled.
c. Your assets and wishes would not only be executed but protected from ill-intentioned people, and your own cognitive decline.
5) You have peace of mind knowing your affairs are in order.
I recommend organizing the information in a portable compact organizational product such as binder with clear dividers, or an accordion file folder. You should update this once a year to ensure the most up to date information is in their respective folders. Consider setting a reminder on your phone or write it in ahead of time on your calendar.
a. Including information of lawyer and firm.
o POA documentation.
o Health care directives.
o Burial/ funeral wishes.
Attorney Mary Zogg from The Zogg Law Firm, suggests that although these documents are personal and hard to talk about, it is even more difficult at a time of grief. Health care directives tell your most trusted loved ones what to do and how to help you, while you are still alive. Locating these directives after your passing is not helpful. Consider this: what if you didn’t give this information to your loved ones and never had the conversation? They decide to bury you, but your burial/ funeral wish was to be cremated. Some choices cannot be undone or may be too costly to try to fix; think it through and talk it out ahead of time.
o Driver’s license (copy)
o Social Security card
o Citizenship Paperwork
o Marriage Certificate/ Divorce or Separation Paperwork
o Birth Certificate/ Adoption Papers
o Important Medical Records
In the case of an evacuation for a natural disaster, photo identification is how first responders and local law enforcement will allow you back into your community and into your home. Obviously replacing these due to a fire or natural disaster can be time consuming, so having them easily accessible can be immensely helpful.
In the event of your passing or sudden decline of your health, Attorney Zogg suggests that this will create ease for those involved so that all documents needed by them to identify you may be found in the same place. It is better to have a consolidated important file location than to not know it exists or where to find it when you need it.
a. Include the most recent statement and account numbers.
b. Financial advisor(s) information
o Banking Information
a. Include the most recent account summaries
b. Include all account numbers
c. Personal banker information.
d. Branch information.
a. Mortgage, lines of credit, personal debt, etc.
b. Auto loans
c. A list of all open credit cards
o Most recent tax returns.
a. CPA information.
It is important that your financial advisor be aware of any major changes in your health so they can make help you make appropriate decisions on your investments and ensure beneficiaries are named. You should be meeting with your advisor at a minimum of twice annually.
o Life Insurance
a. Include the most recent statement and policy number.
b. Include information on all policies.
c. Advisor information.
o Auto Insurance
o Home Insurance
o Any other insurance policies.
I want to take a moment to specifically discuss life insurance. Life insurance can provide financial relief to your loved ones when they are deep in the grief process. As an adult, my Mother’s life insurance policy helped me make up for the loss of income I experienced; I chose to be a caregiver to her as much as I could while balancing my job a professional athlete. I didn’t always execute this balance well, and my performances suffered; therefore, so did my living. It was immensely helpful to me to me; I was able to not worry about returning to work immediately, and instead focus on healing and settling her affairs.
There are so many different types of policies. There are many variables to consider when selecting your policy. Michael Singh, owner of Singh Insurance, suggests that having some form of life insurance rather than having no life insurance is recommended. Many people have life insurance through their jobs, but when you take a deeper look at these policies, many times they are not portable, meaning you can’t take it with you if you leave your current employment. They are also basic policies that pay a certain amount based on your salary. These policies are good to have for cost purposes but its highly recommended to have a life insurance policy that you own through the individual market. When you are looking for life insurance through the individual market there will be a wide range of options, Term Life, Universal Life, Indexed Universal Life, Guaranteed Universal Life, Variable Universal Life, Simplified Issue and Whole Life to name a few. To find out what is the best option for you its best to meet with a life insurance agent. Generally speaking, as you age your health starts to decline. Its great idea to get a life insurance policy when you are younger and healthier as your insurance costs will be more economical. However, if you are older there are still options available. Another benefit of having a life insurance policy is that the proceeds get paid directly to your beneficiary, usually tax-free and this is advantageous for many different reasons.
Furthermore, insurance to protect your assets in the event of a natural disaster is imperative, especially if you live in an area that is higher risk for natural disasters. You’ll notice I mention “Home Inventory” under assets below, it partially falls under insurance as well since it is tremendously helpful in the claims process after a natural disaster or break in. It is a good idea to take a home inventory of your personal items. This will make the claims process a lot easier than not having one. Micheal Singh elaborates further: "Some people simply take a video of all their belongings with pictures and document the receipts to show how much they paid for a certain item. If you have high value items such as jewelry or art, on a standard home policy they would have to be scheduled in order to be insured. It’s also a good idea to review your home insurance policy to see how your personal property is insured. Is it insured on ACV (actual cash value) or RC (replacement cost)? It is better to insure your personal items on replacement cost so that the insurance company will not take into consideration depreciation. Furthermore, standard insurance policies ISO, cover your personal items on a named peril basis, you may want to add the “special personal property” endorsement to broaden the policy language."
o Deed and proof of sale of your home or any other properties owned.
o Title for your car(s).
o Art, jewelry, RV’s, boats, etc.
o Home inventory
I thought I was in final stretches of settling my Mom’s estate when our CPA noticed something; thanks to a tax document he located, we found out there was an additional fund with shares in it that we didn’t even know about. I simply didn’t have a grasp on where all her assets were, nor did her financial advisor. Attorney Zogg, advises that no one knows your finances better than you do. It is an asset to know with whom you have counseled during your life on these matters: your advisors. These individuals can help ease the process and provide them peace of mind while they administer your estate. That way your loved ones can feel confident that they’ve not missed an account or overlooked an asset.
When it comes to personal property items of significant financial or sentimental value, have a list. If you wish your wedding ring to go to your first-born grandchild, then be specific. Those family heirlooms have sentimental value and can be a source of conflict upon your passing. Make life easy; this ease may be found in specific bequeaths of jewelry, paintings, china, etc. As mentioned earlier in the insurance section of this article, a personal property inventory can also be immensely helpful in the case of a natural disaster as it will ease your ability to make insurance claims.
o All memberships and subscriptions (Anything that needs to be cancel on the event of death or incapacitation)
a. Stores (i.e. Costco, BJ’s)
f. Credit cards.
g. Sunpass/ E Pass
h. Meal delivery
o List any other expenses or bills that you have and the account numbers associated with them. You could also include
a. Cable/ internet
d. Garbage pick-up.
f. Pool maintenance
g. Lawn care
h. Pest control
o Important Passwords
b. Tax filing
c. Email accounts.
d. Phone and computers.
o End of life communications
a. If you have a video you want to record for your family to help them remember you.
b. Any letters to loved ones.
For months after my Mother passed, I was monitoring her physical and digital mail and bank account statements for anything that was on autopay. It took nearly 6 months before I had everything cancelled that was on a subscription service. Attorney Zogg advises that you do your heirs and family a favor and have all your financial information in one place. Your recurring monthly charges will continue. There is no need to continue paying these expenses after you have passed, and there is no way for your representative to know what memberships you have, how to access your information easily and online.
Download the free checklist below and let it be your guide to start to get these documents organized in one place. If this article speaks to you and you need some guidance getting your affairs in order, below is a list of my trusted resources. These individuals are compassionate, and successful experts in their field.
Protect your assets. Protect your family. Protect yourself.
Alicia Kaye, M.Ed.
Professional Organizer, Try Organizing
Mary Zogg, ESQ.
The Zogg Law Firm, LLC
Insurance Agent, Singh Insurance and Financial Services
David Nameniuk, CPA, JD
Tax Pros of Clermont
Chad Campbell, VP Branch Manager
Fairwinds Credit Union