Thursday, April 29, 2010

Make life easier in case of an accident

If something were to happen to you would your spouse, guardian or executor know where to look for your important personal information?  Most of us would have to say no, it would be very difficult for someone to find our information/documents if something happened to us.

It’s a difficult subject to think about, and even harder to talk about with others, but preparing your personal information in case of an accident will help both you and your executor in a difficult time. 
The following is important information that you should have organized and available for your executor:
  • • Where your will is located.
  • • List of insurance policies and coverage, where policies are stored.
  • • List of loans, bank accounts, term deposits and other investments.
  • • Location of safe, safety deposit boxes and how to access them.
  • • Contact information for your lawyer, financial planner and insurance agent.
  • • Location of keys for house, vehicles, cabin…
  • • Organ donation wishes.
  • • Funeral wishes (kind of funeral, where to be buried or cremated…)
  • • Computer and email account passwords.
You should make sure your executor knows where he/she can access these things.  If you have children, you should also talk to those you want as guardians, write it in the will, and speak to the executor about that decision.  It is usually good to keep your executor and guardians separate.  While you need to prepare the above information for your executor, you also want to protect it from being found or abused by someone else.

Out of convenience, many aging parents place one of their children, usually the executor, as a joint account owner, making it easy for the child to pay bills and pay taxes.  This is convenient and low cost but it creates some issues as well:
  • • The joint owner has complete access to the account, and may receive all money in the account upon the death of the parent, meaning the money may not go into the estate.  This may not be viewed favorably by the other family members.
  • • In family situations, the joint account owner may be held accountable by the rest of the family for all transactions going through the account, both real and imagined. (Trust me, many children imagine their parents have more money than they actually do, and someone must be responsible for the money disappearing)
  • • The joint owner can become liable to parent’s creditors.
My advice: get good legal and financial planning advice before making these big decisions.  They are important decisions to make, so don’t put them off, but carry them out with the help of experts and things will go much more smoothly for your relatives and executor.  Jerry

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