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Financial Literacy - Planning for your heirs
8 ways to leave a mess for your heirs
If you harbor negative feelings toward your family, follow these steps to foster even more bad blood after you're gone.
Planning for your heirs

8 ways to leave a mess behind for your heirs

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," Christner says.

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." 

Berkley agrees.

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," he says.

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.

-- Posted: Nov. 19, 2007
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