Not too long ago I sat down with a new client whose father had recently passed away. During the conversation we discussed his inheritance and that is where the problem developed. As he told me, he has no idea what his inheritance will be because he and his brother are having a hard time locating their dad’s assets. The father was a very private individual and the sons never knew what their dad had. For example, they knew that he had life insurance policies, but they could not locate them. In addition, they knew their dad had a substantial amount in U.S. Savings Bonds and individual stocks that they also could not locate. Needless to say, there was a high level of frustration in trying to locate the father’s assets. I gave the son some ideas as to how to search for the assets, but there will be no guarantee that the assets will be located. Unfortunately, this is a common problem many people deal with, particularly in today’s world where people relocate and change things much more frequently than they did in the past. Although this problem is quite common, it is a problem that can be easily solved.
When people do their estate plans, they generally focus on the legal documents such as wills, trusts, medical and durable powers of attorney. These documents are invaluable to make sure your assets go to whom you wish in a fast and efficient manner. However, although these legal documents are important, there is another document that I believe is just as important and that is what is known as a document locator.
A document locator is not one of those legal documents where you sign and it’s witnessed and notarized. Rather, it is a document that you prepare so that your loved ones will have a road map as to what your assets are and where they are located. This document can be handwritten, typed or whatever. The key is it should be clear and understandable so that your loved ones know where to go upon your passing.
I recommend you list in your document locator all your financial accounts whether it is a bank account, brokerage account or any other type of investment account. Every account should be listed along with its account number. Furthermore, you should also list any liabilities that you owe, such as car loans and mortgages. You should list who the lender is along with the account number of the loan.
I also believe it is important in your document locator to list the various professionals you have dealt with. If you have an insurance agent, financial advisor or an attorney, these should be listed in your document locator. These individuals can provide a wealth of information to your loved ones.
Don’t forget, in your document locator it is also important to state where your personal papers are located. If you have a will, trust or life insurance policy, you should state where these items are located. In addition, it is also not a bad idea to list passwords and logins. Once again, having this information can help your family in closing out your final affairs.
It would be nice if we could do a document locator once and then forget about it. Unfortunately, it doesn’t work that way. It is important that you regularly update your document locator. For example, you may purchase an additional insurance policy or you may change your brokerage house. One thing that is constant in this world is change, and to make your document locator relevant, you must constantly update it as your life changes.
Don’t forget that you also need to let someone know where your document locator is located. If your loved ones can’t locate it, it’s not worth the paper it’s written on. Remember, you don’t have to let everyone know where your document locator is; rather, the person who you trust the most, such as the person you’ve named as your power of attorney, or the trustee of your trust.
Doing a document locator the first time is a little difficult and time consuming. However, what you need to think about is how much easier you’re making life on your loved ones. Death always occurs at the wrong time and it is always emotional. Whatever you can do to make life easier on your loved ones is worth the time and effort, and I can assure you that by doing a document locator and keeping it up to date, you will make life easier for your loved ones when you’re no longer here.
If you would like Rick to respond to your questions, please email him at Rick@bloomassetmanagement.com.