12 Documents You Need Before You Die

By Steven W. Tarta, Esq.
July 5, 2014
• Estate Planning, Life Insurance
• 0 Comments

It is not enough simply to just sign a bunch of papers establishing an estate plan and other end-of-life instructions. You also have to make your heirs aware of your estate plan and leave the documents where they can be found.

Also consider, at least 10 states have been investigating whether some of the country’s largest insurers are failing to pay out unclaimed life policies to beneficiaries. California and Florida have held public hearings on the issue. Under the insurance policy, the companies are not required to take steps to determine if a policyholder is still alive, but instead pay a claim only when beneficiaries come forward.

You can avoid such problems by telling your family where all your estate planning documentation is stored. According to the National Association of Unclaimed Property Administrators, state treasurers currently hold $32.9 billion in unclaimed bank accounts and other assets.

The following is a rundown of the most important documents you must have completed and the location disclosed to your “trusted friend”:

1. An original Will is the most important document to keep on file. Dying without a Will means losing control of how your assets are distributed. Instead, state law will determine what happens. Wills are subject to probate-legal proceedings that take inventory, make appraisals of property, settle outstanding debt and distribute remaining assets. Estate planners increasingly recommend Revocable Living Trusts in addition to Wills, since they are more private and harder to dispute.
2. A Revocable Living Trust can be changed anytime during your lifetime. After you transfer ownership of various assets to the trust, you can serve as the trustee on behalf of beneficiaries you designate. Provided you do so, there aren’t any ongoing fees.
3. A letter of instruction is a useful supplement to a Will, though it doesn’t hold legal weight. It is a good way to make sure your executor has the names and contact information of your attorneys, accountants and financial advisers. Go to www.tartalaw.com and print out and complete “Executors Instructions” under “Tools and Links”.
4. A Durable Power-of-Attorney is necessary; without it, no one can make financial decisions on your behalf in the event that you are incapacitated.
5. File with the County Clerk any documents that list loans you have made to others because since they are to be included as assets in an estate. Similarly, keep a list of any debts you owe to avoid surprising your family.
6. The past three years of Income Tax Returns and Gift Tax Returns should be available. This also will help your personal representative file a final income-tax and estate return and, if necessary a revocable-trust return.
7. List any safe-deposit boxes you own, register your spouse or child’s name with the bank and ask them to sign the registration document as “deputy” for access to the safe deposit box.
8. A Durable Health Care Proxy. This allows your designee to make health-care decisions on your behalf if you are incapacitated. You may also wish to fill out an Authorization to Release Protected Healthcare Information Form.
9. Life-insurance policies are among the most important documents for your family to have. Family members need to know the name of the carrier, the policy number and the agent associated with the policy. Be careful with life-insurance policies granted by an employer upon your retirement, since those are the kinds of financial documents most often forgotten.
10. Create a list of pensions, annuities, individual retirement accounts and 401(k)s for your spouse and children. An IRA is considered dormant or unclaimed if no withdrawal has been made by age 70 ½. According to the National Association of Unclaimed Property Administrators, tens of millions of dollars languish in unclaimed IRAs every year.
11. Ensure that your spouse knows where you have stored your marriage license.
12. For divorced people, it is important to leave behind the divorce judgment and decree, or, if the case was settled without going to court, the stipulation agreement or Property Settlement Agreement. These documents lay out child support, alimony and also may list the division of investment and retirement accounts.