By Jerry Love, LBF Communications
So let’s pretend for a moment.
Pretend that you’ve actually put some thought into creating your estate. In other words you’ve drafted a Last Will and Testament (or a trust of some sort) and executed powers of attorney for financial and health reasons.
Now, I know, based on statistics, only about 35-40 percent of you have actually done this. That’s why we’re pretending a bit.
As part of the plans you create, you name a person or persons to see that your plans are carried out. This would be attorney-in-fact who pays your bills or makes a medical decisions for you if you’re not able. It would include the administrator of your estate after your death. So you’ve created a plan and named appropriate persons to execute the plan.
Now do one more thing – help these folks who have volunteered to help you with your plans!
Take time to get organized. Some of you just tuned out; stay with me. You don’t have to spend months categorizing and labeling every coat hanger in the closet. Take a day, a pad of paper and a pencil (or computer), pour a cup of coffee, and make some beneficial notes for your helpers.
Income and Expenses – Start with a list of your income sources. You don’t have to list amounts down to the penny or even any amount at all. Upon your death or incapacitation, your representative will need to know the sources of income you receive. If you’re incapacitated your agent will use the income to adequately budget for and pay your expenses. At your death, some of the sources will be need to be terminated.
The same goes for your regular monthly or quarterly bills – make a list. Once again, dollar amounts aren’t as important as the payees, especially if you have expenses that aren’t the normal utilities, subscriptions, insurance premiums, etc.
Asset List – That same day you’re listing the income and expenses above, list your major assets. Include your home and other real estate, vehicles, bank accounts, retirement and investment accounts, and any core item that will make up the majority of your estate.
Don’t forget life insurance policies and annuity contracts which can be easily overlooked. This list will be of great help to your agent.
Collectibles / Memorabilia – When you’ve finished the two lists above, you’re on a roll. Don’t stop! Another list to create includes those items that may not be major assets but have some significant value. This would include jewelry, coins, firearms and other such items. One particular lady the Foundation worked with had collected numerous sets of fine china. Thankfully she had kept a legal pad with details of each pattern included. This list was invaluable in accounting for these collectibles as her estate was settled.
Once again, assigning specific value to this list is not critical. It is mainly for identification purposes. This type of list is also important in identifying family heirlooms. I often share the story of the “wooden bread bowl” belonging to an older acquaintance.
This worn family treasure was carried from Germany to the US by her grandmother but could have been mistaken for a garage-sale item!
These lists are a good starting point to getting organized after you have created your estate plans. Some of you could complete these three lists before your coffee gets cold. Beyond providing this basic information for your representatives let’s see what else you can do.
Location of Important Documents – Write down the location of important documents and items that your representative will need. Included on this list are items such as your estate planning documents, insurance policies, vehicle titles, stock certificates… any document or item your personal representative will need to execute your plans. Many of these may be in the same location which makes your task and that of the representative easier.
Don’t forget to include on your list the location of any safe deposit boxes and box key(s). I heard a story recently about a gentleman who had worked all across the country. The executor had a bank box key, but no record of the bank where the box was located. It was never found! Equally as frustrating (and costly) is the bank box with no key.
All of these lists should be made available to your representative before they are needed. Remember, this is a person in whom you are placing a great amount of trust but it’s still important for you and your agent to safeguard the information carefully.
Now you’re permitted to take a break – but not a long one. Let’s look at a different aspect of getting organized.
1. Let It Go! – Some cool, rainy morning announce to yourself, “Today is the day!” Then get busy tossing stuff out. No need to keep ten years’ worth of bank records, nor your entire unabridged history of federal and state tax returns. Weed out correspondence and trash that stack of privacy statements. With electronic recordkeeping, most banks and other financial institutions can produce sufficient historical statements and records for you. With a secure log-in, you can retrieve most information from their website.
Note: Generally tax returns should be kept for at least 6 years. Check IRS.gov for guidelines. ALSO Note: Shred or completely incinerate the items you’re “tossing” to prevent identity theft.
2. Let It Go! – If there are items you are considering leaving as a gift “one day” to a family member or a dear friend, why not give it now? You, not your representative, will get the joy of presenting the item to the person. You also get to experience the appreciation of the recipient. Obviously, this doesn’t apply to an item you’re still using, but if it’s gathering dust or hidden in a drawer, let it go. Give it graciously.
3. Let It Go! – Among your assets you may have property that could currently benefit your church or another ministry organization. Real estate, stocks, bonds, or mutual funds make ideal gifts to ministries and charitable organizations. Review the property you have and pray about making a gift to support the spread of the Gospel. There are tax advantages for giving assets that have appreciated in value. There is also an advantage to giving real estate located in another parish or state by potentially reducing the cost of administering your estate.
Now it’s time to stop pretending. If you haven’t done so, create an estate plan that allows the personal representatives you choose to care for you and your possessions when that need arises. Then get organized to make the job easier for those who accept the task of acting on your behalf.
None of the planning and organization is ever easy, but a little preparation can smooth the path for others.