Do You Have Your Financial Information In Order?

young couple filling out employment forms and choosing beneficiaries

Preparing and organizing your financial information now before you are no longer capable will bring peace of mind to both you and your loved ones. It will ensure proper management of your financial situation and afford control over your end of life and legacy. The goal is to make and maintain an accurate list of accounts and passwords and relevant contact names of your professionals and at financial institutions. Planners and books (e.g., "Did I Forget to Mention?"; "My Life Directory"; "I'm Dead. Now What?") are available to help you understand the scope of the project and start the process of organizing all records and personal information. Whether you are a parent or not, married or single, nearing retirement or just starting out, informational instructions will spare your family a lot of work and heartache.

Gathering Financial Information Needed

The assumption is that you already have an estate plan with necessary documents such as a will, living will, durable power of attorney and medical power of attorney (health care surrogate designation), etc. If this is not the case, retain an attorney to create these most important legal documents. You can then focus your attention on the written steps your family should take if something happens to you.

The steps for your family or agent to take will involve accessing a lot of information about you. Managing your bank accounts and investments, paying your bills, and handling your insurance claims are just some of the possible areas your agent might need to address. Thus to make this smoothest for that person, organize this information so it is easily accessible to your agent or your executor.

The information needed includes all the salient information you use as you manage your life. This list is about anyone and anything that is part of your financial life. Ask yourself: "If I could not communicate tomorrow, what would someone need to know to manage my life (or things after my death)?" Where do you bank, and how are those accounts accessed? What about your accountant, insurance agent, financial advisor, and attorney? List their names and phone numbers. Include a list of assets including digital and hard assets. Do you have property deeds? Appraisals for art or antiques? Don't forget to make a list of your ongoing bills including utilities, credit cards, and other debts you pay. Include a list of all companies and invoice types (monthly, quarterly, annually) that automatically debit money from your checking account or that bill your credit card. And what about income? Is your check deposited? Do you receive a pension or annuity payment? Do you need to take an RMD from a retirement account? Finally, how will your agent access this information? Having a list of PINs, and passwords can be helpful. But remember to protect this very important information too so it does not get in the wrong hands.

Organizing Financial Information for Your Agents

The numerous books, planners, and online free worksheets can help you identify those things that need inclusion in your financial information; this can be your starting point. Online websites or apps can store your data and instructions for a one time or recurring fee. These sites are typically referred to as estate-planning organizers, end-of-life planners, document storage, even "death apps." While these options may sound intriguing, a self-directed approach is often best and easier to access. Turning over consolidated personal financial data opens you to the possibility of identity theft, hacking, misuse of your records, erasure, and loss using these services. So be sure to keep this important information secured from prying eyes who don't need the information while also accessible to your agent and executor.

Top view shot of woman sitting at table with laptop and coffee writing on notebook updating financial information.Various methods for storing and organizing your information exist. You might digitize your information in a word editor or spreadsheet and store it on a flash drive. (But do update this regularly. (Imagine if your information was all on a floppy disk!)) Print hard copies of your instructions and information and leave them with other important documents like your will or the deed to your home. Are you low-tech? There is no shame in a binder or spiral notebook containing this information. It is a bit more cumbersome to update, but many people choose to leave instructions to family members in handwritten letters, notes, and notebooks. Be certain your handwritten instructions do not vary with multiple papers scattered and undated. (And please don't store this under your couch cushion like Aretha Franklin's will.) Stick to a standard methodology, and throw out outdated lists that would only confuse your agent later.

Once you have this information, update it. Keep these records accurate with annual updates or any fundamental shift in how your finances are managed and by whom. Be sure your executor and other relevant family members know the location of this information. If you want your wishes to remain private until you are incapacitated or die, perhaps you might seal flash drives and hard copies in envelopes. You would at least know if it had been opened.

Putting it All Together

Preparing your financial records for your family can be time-consuming, but it is not complicated. The true goal of this task is organization and consolidation. And it is one of the most important financial tasks you will undertake during your life.

When you feel your project is near completion (other than annual updates), ensure nothing is being overlooked by consulting an estate planning attorney who will make sure you have all of the necessary legal documents in place. I provide these services and would be happy to talk with you about your planning needs. Please contact McCreary Law Office or call the Jacksonville, FL office at 904-425-9046 or the Houston, TX office at 713-568-8600.