When we think of starting a new year, we often associate that change with resolutions. Many people choose the new year as an opportunity to make a fresh start with something that want to begin, enhance or even stop doing.
One of the best New Year’s Resolutions is to prepare a Life Book. Not only will the Life Book goal be attainable (you can finally achieve your New Year’s Resolution), but it will be useful during your life and after death.
A Life Book is a central place to hold records of your estate. Estate planning attorneys frequently work with anxious and confused spouses and children who have no idea how to suddenly take over the financial burden when a loved one becomes ill. A Life Book can ease that transition.
Building the Life Book also forces you to take a fresh look at your own estate. Perhaps it is time to reevaluate life insurance policies or take another look at your qualified retirement beneficiaries.
How do you build a Life Book?
Start with a thick three-ring binder. For most people, a 3- or 4-inch binder will be a good size. Buy a binder that is easy to open, as some can be quite difficult and will cause you to dread working with your Life Book.
Next, if you have many documents, consider buying a color-tabbed Table of Contents. Prepare the book first, then go back and fill in the Table of Contents.
In the front of the binder, after your Table of Contents, make a list of professionals with whom you do business and any financial organizations where you keep accounts. Include your insurance agent, financial advisor, estate planning attorney, personal banker, any specific individuals you work with at brokerage firms, CPA or accountant, preferred funeral home and for those with small businesses, any necessary business contacts. You may want to make a note under each professional to indicate the number and types of accounts held with that individual.
After creating the list of financial contacts and financial institutions, begin filling the binder with important documents. If your estate planning documents (Will, Powers of Attorney, etc.) are folded, place them in page protectors. If they are in a separate estate planning binder, make a note in your Life Book of the location of that binder and who to contact in case it cannot be found.
After legal estate planning documents, place other documents that are less likely to be changed. These may include copies of real estate deeds, life insurance policies, prepaid funeral arrangements and car titles. If you are using a Table of Contents, be sure to place tabbed divider pages between each new section.
After filling in the unchanging documents, add in copies of documents that will need to be replaced annually. This is where you will include copies of tax documents (even if you do not file taxes) such as dividend statements, income statements and even taxes.
Next, drop in one recent statement from each bank account, investment account, and retirement account. Include a note with each account as to whether the account includes a Payable-on-Death beneficiary on the account.
Complete the binder by including any other documents that you feel should be included.
Preparing a Life Book is a simple and inexpensive way to reacquaint yourself with your own estate and financial health while giving your future fiduciary a much easier transition.