The Key To Life Document Organization

by | Wednesday, March 2, 2016 4:44:00 PM | 0 comment(s)

So many stories over the course of many years in the financial industry. There was the daughter that called from her father’s hospital bedside, desperate because she couldn’t access any of his accounts to pay his bills.

Another woman died in an accident while on vacation, and her sister had to go through a lengthy legal process because she couldn’t find the original copy of her sister’s will.

A family had to make the heartbreaking decision to take their loved one off of life support, unsure that is what he would have wanted, since they couldn’t locate his health care directive.

These situations all could have been avoided by simply having key life documents gathered in an accessible, organized fashion where loved ones could find them.

“I Don’t Want To Be A Burden…”

Universally people do not want to be a burden to their loved ones when they are incapacitated or pass away. Having key life documents organized and in a place they can be located and accessed is critical to achieving this goal. If the father in the hospital had a power of attorney appointing one of his children to take care of financial matters, his daughter would have easily been able to take care of his bills.

If the woman who died on vacation had a document that indicated where her original will was her sister could have avoided the time, expense and stress of going through an extended legal process.

If the loved one on life support had a health care directive, or living will, easily accessible the family could have made confident decisions on his behalf.

The Most Important Document

The most important key document to have available in an emergency is a health care directive or living will. These appoint someone to make medical decisions if you are incapacitated and outline what kind of medical interventions and care you desire.

Equally important is a power of attorney, which gives someone authority to sign for you and make decisions on financial and other matters if you are incapacitated. It is important to note where the copy with the original signature is kept, as some financial institutions require an original for certain transactions.

Another key document is the will, which appoints an executor, or personal representative to handle your affairs after you die, and indicates how your assets are distributed. These documents all outline who you want to be making decisions for you if you ever become incapacitated and after you die, but they are useless if nobody is able to find them.

Accessibility is Key

While there is value in having documents and information stored online, the biggest negative is accessibility. With passwords and security logins to go through, in an emergency this can be a big drawback. Particularly with a health care directive, where time can be important when making medical decisions, having a paper copy at your fingertips can be a lifesaver.

With the explosion of information and transactions that we do online, having something in paper form outlining accounts and passwords could be critical. The safest place for original documents that are expensive, or impossible, to replace is in a safe or bank safe deposit box. Many people also keep original legal documents with their attorney.

Having copies of those documents in an organizer, and indicating where the originals are located, would cover all of the bases.

Gather and Inventory

Going through the process of gathering important documents and information is valuable for many reasons. It helps to see what is missing and if further information is needed before an emergency. Having an inventory of all financial assets and accounts in the beginning stages of making an estate plan can save valuable time and legal fees.

The attorney can also see if there is a need to re-title assets in order to avoid probate. From a financial perspective one can see if it makes sense to consolidate or close accounts, or locate any original stock, bond or savings bond certificates.

It is a valuable exercise for anyone who owns a home to have a place to gather receipts and note dollar amounts of any home improvements, so they can be added to the cost basis of the home before it is sold.

A Common Misconception

Having these life documents organized and accessible is invaluable. It is a common misperception this is something only seniors need to think about, but it makes sense for people of every age to go through this exercise.

College graduates, newly married couples, new parents—all have started to accumulate documents that continue to build as we live our lives.

An organizing system can save a great deal on attorney fees, penalties from missing payments, expenses replacing original documents, and emotional stress.

After a death it eases the burden on loved ones already dealing with grief, and enables them to focus on each other. This truly is the best gift anyone can give to their family or people they care about.

Gil B.

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