Benjamin Franklin once quipped, “In this world, nothing can be said to be certain except death and taxes.” Because many people don’t take steps to put their affairs in order, many times, death and taxes go hand in hand.
The National Association of Unclaimed Property Administrators reports that state treasuries hold more than $32 billion in unclaimed bank accounts and assets because the account holders didn’t make that information known to their family members. The great news is that unclaimed assets are protected and your heirs can claim them. But it might not be easy without proper documentation.
There are a few simple steps, usually overlooked, that will ensure your lifetime of hard work will become a legacy.
First and foremost, keep your documents in a single secure place and make sure your loved ones know where to find them. What good is a living will if no one can find it? The first thing they should find is an original copy of the will. By also creating a letter of instruction and including trust documents alongside your will, you will prevent a lot of confusion.
A life insurance policy can alleviate funeral costs and make sure anyone dependent upon you will not have to suffer financially. Make sure to include your life insurance policies along with any retirement accounts in your collection of documents.
Also, make sure to list and collect any documents showing proof of ownership of real estate, vehicle titles and stocks. List your bank accounts and safe deposit boxes. Including tax documents also will establish proof of ownership.
With so much of our lives and information now online, you might also want to consider listing your usernames and passwords for online accounts, which could be helpful to your loved ones in discovering assets and establishing ownership.
Some choose to set up a portion of their assets for planned giving or bequests to charitable causes. You can choose to endow a specific fund, make a one-time gift or provide instructions in your will asking the beneficiary to choose an organization. These are often set up as revocable living trusts.
While I agree with Mr. Franklin that nothing is as certain as death, you don’t have to leave your whole life’s earnings to the discretion of the state. If you take these steps, you can make sure your hard-earned assets benefit those you care most about.
Chirag Chauhan is director of financial services at The Barnett Group, a benefits and financial services firm.