In part 4 I talked about basic estate planning and why it was an essential step in the retirement process. This section addresses getting organized and compiling the information you will need not only to prepare an estate plan but to know who’s on first and what’s on second. Remember Abbot and Lou Costello’s baseball skit? This article will assist you with laying out your personal estate planning binder and subsequent articles will review what is inside each section with samples that you can use where appropriate.
Before I continue, one sentence from the previous section truly stands out and warrants repeating.
“Estate planning pays BIG dividends up front that at first glance seem transparent. By going through this process you will know who will inherit, what they will receive, where all of your assets are NOW, total net worth, and it will help you focus on consolidating and simplifying your estate so that you can better manager your assets TODAY.”
The key to this process is a simple binder with 8 tabs. I picked up my estate plan which I title “Survivor’s Instructions and Guide” from my safety deposit box this week to complete my annual update. My binder has 8 tabs and in the front and back cover inside pockets I keep the original signed and witnessed copies of my wife’s and my Wills and Living Trusts.
I keep this binder in my safety deposit box because it includes all official documents plus most of the information that the executor will need to settle our estate. It is wise to update your binder annually because things do change. Some of those changes include; maturing CDs, securities that are bought and sold, new car purchases, or change of residence. You may also have to update contact lists for your trusts. I am always amazed at just how many things can and do change each year when I do my update.
The first section is titled “Letter of Instruction” and includes just that, instructions to your heirs. This document summarizes binder contents with additional supplemental information such as safety deposit box numbers, date the information was last updated, and provides some insight into the wills and trusts that your executor will need when the time comes. It also directs the executors, my wife and our children, to the two key reference books that I keep in my book case, Plan Your Estate and The Executor's Guide that will help them administer and settle the estate.
NOTE: Those with small to average estates will find this article especially
helpful. Small estates may only require a Letter of Instruction, Survivor’s
Checklist, and a basic Will.