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 Preparing
your finances for death and disaster
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You never know if you might inadvertently step into
the path of a truck.
I recently attended the funeral services of a young
man who died differently, though unexpectedly. Ten years before,
at age 29, he had suffered an accident that left him with short-term
memory problems. After the funeral service, his mother confided
that she discovered two bureau drawers in his home filled with bills
and account statements going back a couple years. On the envelopes
her son had attached sticky notes with reminders addressed to himself.
It was impossible for her to immediately determine the current status
of the accounts.
"He left behind a mess. I'm the one who's supposed
to leave behind a mess," she said, voice heavy with grief and
irony.
Dealing with a close family member's death ranks way
up there among emotionally traumatic experiences. Those left behind
must deal with pain and loss, and in this disoriented state, must
also put right the financial affairs of the deceased.
We can do much to alleviate at least some of the suffering
our survivors will go through when our day comes if we take steps
to put our finances in order now.
Take inventory of your assets
Creating a system for your finances accomplishes a couple of goals.
It facilitates processing an insurance claim in the event of a disaster,
and it makes it easier for loved ones to put their hands on important
information in the event of your death or sudden incapacity.
You can organize your finances any number of ways,
but here's one method:
- Purchase a fireproof box.
The box should be large enough to hold documents, precious jewelry, and important
photos, tapes or DVDs of family members -- the stuff of family history
that will be treasured for generations. I found a fire-safe security
file that's about 10 inches high, 12 inches wide and 8.5 inches
deep for $65 at an office-supply store. It has a one-half hour UL
fire rating, which I hope will never be tested.
- Set up a file system with appropriate
subject categories. Reserve one file folder that you might
label "household possessions" for photos of your belongings:
furniture, electronic and computer equipment (with serial numbers
inscribed on the reverse side), artwork, books, collectible items,
etc. It would be useful to provide an estimate of their value,
too. You can use other mediums -- videotapes, computer disks or
DVDs -- on which to record this data if you prefer. This will
speed along an insurance claim in the event that you suffer a
loss due to burglary, fire or some other disaster. You might want
to make duplicates of this information and store the duplicates
outside your home -- in your office or a safe-deposit box, for
example (just in case your fire-safe security file melts, succumbs
to a flood or is stolen).
- Reserve another file folder for "important documents."
It should contain birth, death and marriage certificates,
military discharge papers, divorce decrees, Social Security cards,
passports, property deeds, auto titles, etc. Another file folder
might be labeled "investments" with information about
pensions, brokerage and retirement accounts such as IRAs or Keoghs.
Obviously you won't be able to store all your statements in one
folder, but include copies of a recent statement for each account,
and update once a year.
- Set aside a folder each for insurance,
medical records and bank records. The insurance folder
can hold policies and correspondence regarding your auto, life,
disability and health policies; another might contain important
medical records, and yet another, photocopies of credit and debit
cards, along with a copy of recent bank and credit card statements.
Originals of wills and trusts can also be placed here if space
allows, or you may be more comfortable keeping a copy in the box
and the originals with your attorney.
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