My heart was shattered last year when I lost my mother.
Luckily, she did an exceptional job overall making my inheritance process as easy as possible, but there were some ways that the experience could have been less stressful.
In another article on this subject, I shared some expert tips on avoiding probate, which is one way to make your heirs’ inheritance process much easier.
Here are six more ways to help your heirs have a painless inheritance experience.
1. Keep a list of passwords for everything tech
We keep a lot of important information in our cellphones, computers, online accounts, tablets and other technology. When you die, your heirs will need access to that information, which means they will need your passwords and pin numbers — not just for your hardware but things like pensions, bank accounts and investment statements. Don’t forget social media usernames and passwords.
These should be kept somewhere safe, but where your spouse or other trusted individual can find them, says Tracy A. Craig, Partner and Chair of Trusts and Estates Practice Group at Seder & Chandler, LLP, in Worcester, Massachusetts. “Without these, it may be impossible to gain access to said devices and accounts. Certain tech companies require the executor of the estate to go to court to obtain a specific order to access passwords, which can cost thousands of dollars. I’ve had clients who needed to go to court to obtain an Apple password and it cost $5,000 in fees to do this.”
One idea: some technology companies, including Facebook
META,
and Google
GOOGL,
allow you to name an individual to access an account after you die or haven’t used the account for a certain period of time. You can also explore this option with other companies where you hold accounts.
2. Make a list of all assets and accounts, with contacts
At first, this might seem like a monumental task, but it’s crucial for your estate planning. My mother typed these out in a document, and I use a spreadsheet. Make sure to include:
- Investment accounts, including checking and savings accounts, CDs, 401(k)s and other retirement accounts, brokerage accounts, and mutual funds.
- Places where you pay bills, including credit cards, electric, water, and health insurance.
- Other assets, including your car, life insurance and the property you own.
Related: Don’t leave a clueless trustee behind in your estate plan
3. Put everything in one place
“At least a few times a month our office will receive a call from a grieving heir who doesn’t have any idea where the recently deceased’s estate planning documents are, who services their financial accounts, or how to access these accounts,” says Scott Glatstian, an estate planning attorney at Rosenblum Law in Clifton, New Jersey.
“These are people who didn’t even create a plan with us,” he adds, “they’re just hoping there’s some sort of resource available to provide this information, but there isn’t. Anyone in this position is going to have to scour the home of the deceased and hope to find what they are looking for.”
To prevent this from happening, keep your list and paperwork in a safe or waterproof and fireproof container at home. My mom used a Suze Orman Protection Portfolio, which my husband and I now use for our paper documents. It’s also a wonderful way to keep your financial house in order while you’re still alive. Here are some typical items to include:
- List of assets and accounts.
- List of passwords.
- Estate planning documents, including a living will, will, trusts, financial power of attorney and health proxies.
- Prepaid funeral expenses, including burial plot deeds, coffin purchases, funeral services and prepaid cremation plans.
- Life and car insurance policies.
- Birth and marriage certificate.
- Divorce decree.
- Prenuptial agreement.
- Adoption papers.
- Work permit and citizenship papers.
- Social Security card.
- Copies of your driver’s license and medical insurance card.
- Titles to any physical assets, including cars and property.
- Most recent tax return.
4. Convert paper treasury bonds to electronic holdings
My mom made some smart I Bond purchases long ago that provided exceptional returns. She often delighted in telling me how excited she was to leave them to me. Maybe you made some smart bond investments and are looking forward to leaving them to your heirs, too. But Mom (and you) would probably be horrified to learn how difficult it is to redeem paper I Bonds.
Many banks have stopped cashing bonds, as detailed in a recent New York Times article. I thought I was lucky that my bank was willing to cash the bonds, but the manager said I would have to fill out all of the information on the back of each bond. With a large pile of bonds, I thought it would be easier to just send the whole lot of them directly to the Treasury to be redeemed. I was wrong. The process is not easy and requires a leap of faith.
I had to create an online Treasury account, input each bond’s serial number, and then send in the paper bonds with a form to the Treasury. I received an email confirmation that my paperwork was received, with the following timelines:
- Cases requesting to cash your savings bonds held in your name would require at least seven weeks.
- Claims for missing, lost, or stolen bonds would take at least six months.
- In all other cases, do not expect a resolution for at least 20 weeks.
My paper bonds were all converted to electronic holdings and/or redeemed and sent to my bank account within the time period. But the Treasury Direct site is confusing, and I still had to email and call support to find out that everything had been done.
Also read: ‘My father, 75, died without a will’: His ex-wife, fiancée and children are hiding his financial documents. What can I do?
5. Plan for unforeseen health and financial issues
Before your heirs inherit your estate, they may need to help you make health and financial decisions while you’re alive, especially if you’ve had a stroke, car accident or other major health problem.
You can create three legal documents to make this process much easier: a living will (which details whether or not you want anyone to take heroic measures to prolong your life); a durable health care power of attorney, also known as a health proxy (which designates someone to make health care decisions for you if you are unable to); and a financial power of attorney (which authorizes someone to make financial decisions for you).
Without a financial power of attorney, says Glatstian, “if the finances of the person experiencing the emergency are not tended to while they are out of commission, they may be stuck with a huge financial mess of late bills, missed insurance premiums, angry tenants or a host of other issues that could have been avoided with proper planning.”
Without the health care surrogate documents, families are tasked with trying to make difficult health care decisions in emotionally stressful situations.
If these documents are not in place, your family may need to go to court to manage your health care decisions (usually called guardianship) or your financial (usually called conservatorship). “The court process to obtain these appointments is invasive, requires medical information and costs many thousands of dollars,” says Craig. “I’ve been involved in cases where incapacitated individuals did not have a durable power of attorney. The amount of fees these cases cost can be staggering — tens of thousands over a period of years.”
In addition, courts can appoint third-party attorneys to review matters, adding cost, time and family stress, and may require the conservator to post a corporate surety bond (an insurance policy in case the conservator steals or makes a mistake).
Don’t miss: My cousin left his estate to 6 relatives, but only one cousin, worth $30 million, received the inheritance — due to an ‘unexpected surprise’
6. Put your burial wishes in writing
“I once had a family fight over a burial because the last wishes were not in writing,” says Craig. “I had another case where the decedent committed suicide but had put his cremation wishes in writing. This allowed the cremation to take place even though the family was not in favor of it.” To prevent these arguments, include your burial wishes in your will.
Margie Zable Fisher is a freelance writer and the founder of The 50-Year-Old Mermaid, where she and other 50+ women share their learnings and experiences on living their best lives after 50. Her website is margiezfisher.com.
This article is reprinted by permission from NextAvenue.org, ©2024 Twin Cities Public Television, Inc. All rights reserved.
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