They've been on the market for years—so-called"beneficiary books" and other template-basedfiling tools that can help an heir, spouse, orexecutor sort through a person's affairs upon their incapacitationor death. There's no question that these toolsmake a lot of sense, but they're not only for the retirementset. Any individual with assets should create aneasy-to-find, easy-to-understand file of financial informationand keep that data in a safe, accessible place athome, with their attorney or Certified FinancialPlanner™practitioner, and possibly with a trusted friendor relative who lives far away.
The following information should be organized in aprepurchased kit, a school binder, or in scanned documentsstored on a computer disk:
In organizing all of this information, it makessense for the individual to put themselves in theshoes of the people they've selected to handle thingsin a crisis. Since these individuals may be capablebut still upset, it's essential this information be simpleto navigate and updated as often as possible.When someone dies or is incapacitated, loved onesare typically distracted. They may forget detailsthey've been told. That's why a detailed index of thisdata (with page numbers or folder labels) is so critical.Many people think that putting together a comprehensivebinder or box of information is all theyneed to do, but a simple summary is particularlyappreciated at stressful times.
Some experts advise individuals to update their willand other estate preparations every 5 years or as oftenas change takes place. Optimally, this critical informationshould be updated every year. A person's address,relationship, job status, and financial details can certainlychange within a given year; that's why recordkeeping needs to keep pace with this information.
Reprinted with permission from the Financial Planning Association (www.fpanet.org),the membership organization for the financial planning community.