|8 ways to leave a
mess behind for your heirs
|Page | 1 | 2 | 3 | 4 | 5 |
The aim in planning is to minimize the
financial exposure to your loved ones when you're
no longer here. "By having an estate plan in
place, that avoids many, many, many of those expenses,"
6. Leave messy financial records
Pawing through someone else's disorganized records
doesn't fit anyone's idea of a good time. Add in grief
and the stress of trying to unearth a will or some
other evidence of planning and it's downright chaos.
Keeping track of all
of your information and organizing
it in a recognizable way is vital,
says Christner. "Social Security
numbers, insurance policies, the name
of the companies you do business with,
your brokerage accounts and where
they're held, and account numbers
should all be included."
Just because a person passes away doesn't
mean that credit card companies stop billing. "The
estate is still going to owe the money," he says.
"And all of a sudden children are looking at
bills that are past due and they just don't have the
information. So many of us now keep information on
our computers. Passwords, screen names, stuff like
that -- make that stuff available to your loved ones,"
Use the work sheets on the tools
and resources page to start organizing your files.
You may want to include a letter designating where you want your personal property to go. "Unless it's in your will, it doesn't have any legal standing. But if it's written down, it can prevent fights between relatives where someone says, 'Oh he promised me this' and you can see that it's written down that no, he didn't. He promised that particular thing to someone else because it's in writing and here it is," says Christner.
7. Give your ex-spouse a parting gift
Failing to occasionally update an estate plan or make changes to beneficiaries after divorce, marriage or other life changes spells trouble.
Major changes such as having
children or buying and selling property warrant
changes in your will or trust. Equally important are
making changes to beneficiary designations on retirement
accounts and insurance policies, as those forms trump
anything put into a will.
"An insurance policy
that has a beneficiary on it -- that
is not dictated by a will or a trust,"
says Orman. "A retirement account
that has a designated beneficiary
or a payable-on-death account at a
bank -- those accounts aren't dictated
by a will or a trust," she adds.