Monday, March 18

Do You Have These Important Planning Documents in Order?


If an incapacitating illness or accident were to strike suddenly, would your family (or other designated person) know where to find important documents related to your finances, health care, and personal information and assets?

An important part of managing all of your assets is making a plan that details what you’d like to happen in the future under various life circumstances. These range from illness or accident to death. This process is usually called "estate planning." And doing this planning is important whether you are young and just starting out or older and reaching retirement age. Even if you haven’t made a formal plan, you have assets and documents that ought to be organized for your use and so that your spouse, children, or designee can find them easily in case of an emergency.

This report provides a summary of some of these important documents and tips for organizing them so they are kept safe but are easily accessible.

What Documents Are Important?

As you review the following types of documents, you may wish to make a brief list of those you already have and those you may need. This list will give you a start on organizing.

Wills—yours and your spouse’s

A will states who you want to inherit your assets and appoints guardians for your children who are minors. It also names a trusted executor(s) to administer your estate after you die. Even if you are young, single and just starting out, you typically will have some assets such as bank accounts, a vehicle and personal property. No matter your age or assets, if you die without a will, state law—not you—will determine what happens to your assets, including who gets them.

Although there are good online resources for making a simple will, professional planners recommend consulting an attorney specializing in estate planning who can help you look at other planning documents you may wish to have, such as trusts, health care directives, or powers of attorney.

Trust documents, if any

Many individuals have some form of living trust in addition to a will. The purpose of living trusts is typically to enable transfer of assets to your designated beneficiaries after your death without those assets having to go through probate. Your family or whoever administers your estate after your death will need the original trust documents.

Health care directives and health insurance information

An advance health care directive indicates what your wishes are for health care and who should make medical decisions for you in case you become incapacitated and are unable to decide for yourself. In some states this advance directive includes two documents: a living will, which indicates your wishes for treatment under various circumstances, and a durable power of attorney for health care, which empowers a person or persons you designate to make medical decisions if you can’t. In other states these functions are combined in one document. If you don’t have such a document and are incapacitated, your family may have to go to court to get someone designated to make health care decisions.

Hospitals and other care providers will need to see your insurance cards, including Medicare. It is important that family know where you keep copies of these in case your are unable to provide this information.

Power of attorney for finances

Most people use a durable financial power of attorney to give a member of their family or other trusted person the authority to handle their financial affairs if they become incapacitated. Many spouses or life partners have each other’s active durable power of attorney in case of emergencies. You can also make this document a "springing" durable power of attorney that does not take effect until a doctor certifies that you are incapacitated.

health care directive

Financial account documents

Most people have a number of types of financial accounts that range from regular checking accounts to retirement accounts. Each of these has documents needed by you or by anyone administering your finances if you can’t. These include:

  • Bank account statements, including checking, savings, certificates of deposits, money-market funds or bank-related investment or retirement accounts.
  • Life insurance policies
  • Investment account statements
  • Certificates for stocks, bonds, annuities
  • Retirement plan information, including 401(k)s, IRAs, company pensions, or other plans
  • Information about debts, including credit cards, mortgages, other loans, utilities, and taxes owed.
  • Other insurance information, such as homeowners and auto.

If you have a safe deposit box where you store important documents, you need to ensure that a family member or your designated agent has information about its location and access.

Making a list with information about such financial accounts helps your heirs locate these assets. Many millions of dollars of unclaimed assets are held by financial institutions and insurance companies or go to the government because heirs don’t know of the existence of the accounts.

Keeping copies of the last three years of tax returns with your important documents can also help your agent or executor file current taxes and identify assets.

Real estate and other real property

Deeds to your home and any other real estate you own should be kept in a safe place such as a safe deposit box. You should also keep the title to vehicles and proof of ownership of other property such as cemetery plots or art works in an organized, safe location.

Information about a business you own

If you own your own business as a sole proprietor or as a partner, you should have a plan for succession. Important business and partnership documents should be organized in their own file.

Personal information and family heritage information

Other important documents that your spouse and family may need access to include birth certificates, marriage certificates and any separation or divorce agreements.

It’s also important to note the location of any family items such as photographs or furniture you wish to preserve. That includes items you may have placed in a safe or hidden location.

Tip: A note about beneficiary forms

In addition to insurance policies, many more financial products today allow you to name beneficiaries who would directly receive those assets in the case of your death. The advantage is that these assets don’t have to go through probate. The downside is that the beneficiaries forms override what you put in your will. If you do not keep your beneficiaries on each asset updated using the appropriate forms for each company, the assets may not go to the people you intend. If you use beneficiary forms, keep the specific information for each account and copies of the forms with your papers and update the information with the specific companies regularly.

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Organizing and Storing These Important Documents

Originals of important documents may be stored variously with one's attorney, in a safe deposit box, and/or in a fire-proof storage safety box at home. For example, many individuals keep the original copy of their will, trust documents and powers of attorney with their personal attorney or in a safety deposit box. Experts recommend keeping originals of birth certificates, marriage certificates, separation or divorce papers, passports, deeds to property, degrees or professional credentials, stock certificates and the like in a safe deposit box. Some people prefer keeping important original documents in a fireproof safety box at home, although this is typically less secure than a safe deposit box.

Copies of all these originals, however, should be made and organized in one or more files and kept in a filing cabinet or fireproof storage box at home. To help your family or agent locate specific items, it's important to include a cover list or inventory that lists all the documents and where they are located. You may also wish to provide designated family members or agents (such as those with powers of attorney or named as executors) with a copies of important documents related to their responsibilities together with the inventory of all documents and their location along with information on how to access them and the proper documentation to allow access.

The Payoff for Organizing Your Documents

Putting all your important financial and personal documents in order can be time consuming. The job will go faster if you break it into smaller groupings. But the time spent is well worth it. Having all your important documents identified, organized, and safely stored not only helps you manage your finances and assets more efficiently right now but it will give you and your family peace of mind.

For More Information

Wills, Trusts & Probate from, a legal information website, offers a variety of useful articles on many of the planning documents summarized in our report.

Estate Planning in the Money Essentials series from Money Magazine, gives an overview of the elements of estate planning.