A death file is either a physical or digital file that contains everything that a loved one would need after your passing.
What should be in your death file?
Well there are the obvious documents, like your last will and testament, any trust documents, beneficiary designations, etc. But what else is important? You should have a spreadsheet that lists all of your financial accounts along with user names and passwords – if you consent to them accessing the account. You may also wish to list the services that you have set up for auto-pay. This list could contain many accounts that your loved one might not know about, i.e. a gym membership, a Netflix account, or something bigger like an auto loan. What about accounts that do not have auto-pay? For example, your electricity bill, chances are that this is something your loved ones will still need to keep paying for a while, or they will need it transferred to their name. You should leave an all-inclusive list of every account with online log-in credentials because even a small thing, like your gym membership could become an unnecessary hassle for the ones that you leave behind. Examples of other items you may wish to include are prepaid funeral and burial contracts, or funeral and burial wishes, current deeds, business formation paperwork, etc.
Where do I keep my death file?
If your death file is being stored digitally, remember to give someone close to you the login credentials for your computer. For security reasons, most computer manufacturers will not assist you in “breaking into” your loved one’s computer. If your death file is an actual physical file, you may be keeping it in a safe or lockbox. Make sure that someone else knows how to get into that safe. It is also perfectly acceptable to keep the information on a bookshelf or in a file cabinet. The important thing is that someone else knows where it is and is able to access it if something happens to you.
So, my death file contains all needed information, now what?
Life happens, and things change constantly. Keeping all the contents in your death file up-to-date is extremely important. The user name and password spreadsheet will be completely useless if it’s not updated. Once you have this complete list, you might be surprised at how many accounts that you have. Imagine having to go through that list and contact each business to transfer or close each account. It will be extremely time-consuming as it is, don’t also put your loved one through the trouble of having to work to get your log-in information as well. Privacy laws may prevent them from accessing your accounts without the proper log in credentials.
Other tips on alleviating stress from my loved ones after I pass?
Preplan your funeral and burial. If you’ve ever had to do this for a loved one, you know the stress you will be saving your family by preplanning. If your beneficiaries are mature adults, add them as beneficiaries to your accounts, investments, life insurance, etc. By adding them to the accounts as beneficiaries it will allow for the easy and quick transfer of assets after your passing. Doing so also avoids probate and keeps most assets out of the reach of most creditors. And perhaps most importantly, create an estate plan that outlines your wishes, avoids probate, minimizes tax, or otherwise satisfies your goals. There is a direct correlation between how prepared and organized you are now and the amount of time and money your heirs spend administering your estate after you are gone. Trust us, the relief to your family members during this stressful time is priceless.
Don’t have a last will and testament drafted yet or perhaps you have questions about a trust? Call the Pro’s! We are here to help, and your initial consultation is free!
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