Some Tips for Making Life Easier for Your Heirs
Updated: Aug 25
This is not an estate financial planning advice article. This is a practical advice article about the small stuff that eats up time.
Every family's situation is different and therefore, every estate and family's reactions to dealing with the estate is different. Some estates have administrators that do most of the work. Some estates are probated which may make life easier, or harder. What follows are just some ideas that may make your heirs' lives easier, meaning taking less of their time chasing mundane issues.
Create an inventory of your accounts. By this I mean all your financial accounts including checking accounts, savings accounts, retirement accounts, life insurance policies, medical accounts including medical savings accounts, old Christmas savings accounts, and so on and so forth. Odds are extremely high you are the only person other than maybe your spouse that knows all these accounts exist. Do not count on your heirs easily finding paperwork to identify those accounts either. Your heirs likely will have to deal with so much paperwork that even if evidence was easily available, they will not see it right away.
Verify that a beneficiary is listed on each account. I have found some people are confused with the word "Beneficiary." In this capacity, it is not the person who inherits the account. Instead, it is the person who has access to the account and this is extremely important. In my experience, if an account has a beneficiary, the financial institution will deal with that person to disperse the monies and otherwise address whatever issues exist. If the account does not have a beneficiary, one seems to have to pay attorneys more money to prove the obvious on even the smallest accounts or beat your head against mind numbing red tape. Maybe some people hesitate to list a beneficiary because they think that person will inherit the entire account, so they leave the line blank. The will determines who gets what, not a line on a bank account application.
Understand that the Power of Attorney (POA) expires at death. So if you are handling your parents' affairs, you lose the power to handle your parents' affairs upon death unless you have the next set of powers ready to go. This is not fun because then you have to provide many of the same firms a new set of documents and meanwhile, nothing much gets done. If those other documents are not ready, especially if no beneficiaries are listed on key accounts, nothing but frustration and delays result.
Cause your kids to work out a communication plan upon your demise. Death can be a unifier for children or a divider. Kids will have to communicate whether they want to or not and just trusting they'll figure it out, especially if they don't talk regularly anyway, is not usually a good plan.
Tell your kids what you want done upon your demise. This is a tough topic but leaving your kids guessing is not a great legacy to leave.
I am not an attorney. I am not a CPA. I am not offering any kind of professional advice. I am just sharing my experiences of what I have seen personally and professionally, and what I wish people had told me.
NOTE: The information provided herein is intended for educational and informational purposes only and it represents only the views of the authors. It is not a recommendation that a particular course of action be followed. Burand & Associates, LLC and Chris Burand assume, and will have, no responsibility for liability or damage which may result from the use of any of this information.