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Estate Planning Preparedness

You’ve written a will, completed a durable power of attorney and filed a set of medical directives with your physician. As far as you are concerned, your estate is in order. And from a legal point of view, you are right. If you have been well advised, your wishes about your estate will be clearly spelled out.

Your own experience will tell you that the passing of a loved one is a trial in itself — and that dealing with estate matters can add needlessly to a period of mourning. Taking the time to prepare the estate for your heirs is an act of love that they will appreciate and remember.

Include a Letter of Instruction in Your Estate Planning Documents

Tracking down your safe deposit box key, insurance policies and even your estate-planning documents can be a chore if your executors or heirs are not familiar with the way you arrange your records.

Your letter should specify personal information, such as:

  • Your social security number
  • Policy numbers for life and long-term care insurance
  • Account numbers for bank or brokerage accounts (with passwords for online access)
  • Phone numbers of people you do business with — accountants, attorneys and financial planners

Also include the location of vital records, including:

  • Tax returns
  • Lists of medical expenses and other deductible items
  • Bank statements

You might also share the location of your address book, which will help your heirs in their efforts to notify family members, friends and neighbors about your death.

As an addendum to your letter of instruction, take the time to list all your assets and liabilities. This will give your heirs a concise overview of your estate — and help them prioritize the financial issues they need to deal with.

Make Provisions for Winding Down Your Estate

You should also make sure that your heirs have enough ready cash to pay funeral costs and two or three months of utilities and other expenses. One way to do this is to set up an investment account with a pay-on-death (POD) designation to your executor.

Also provide the information your heirs need to disconnect these utilities when the time comes. Here again, a list is useful. This one should include your service providers and the location of recent bills. In many instances, you can also include an heir on your telephone and utility accounts as someone who is authorized to make decisions, including discontinuing service.