Estate Planning starts by getting organized

I’ve been talking about retirement and retirement plans for a really long time.  When we talk about retirement planning, we often think about how much is enough, how to create retirement income, how much will we get from government benefits and buying RRSPs.  Never downplay the importance of estate planning in your retirement plans.

To begin estate planning you must first get organized.  In fact, if you think about it, being organized is an essential life skill, not just with estate planning.

 In the financial world, getting organized is the root of financial success.  If you want to get ahead financially, you have to organize your finances.  You need a systematic approach to managing cash flow.  You need to understand how much money you spend.  You need to be aware of your net worth.  You need to organize your financial statements.  Getting organized is the starting point to financial independence and freedom.

Successful estate planning is no different.  You need to get organized before you put together an effective plan to accomplish all of your estate needs and goals.

Getting organized for estate planning

Sometimes we think estate planning is really complicated and involves some really intimidating documents like the will, power of attorney and the personal directives.  As much as these three documents are really important to your estate plans, part of your estate plan can be really simple . . . it’s just making sure your paperwork and financial details are organized.

A while back, I created a software program called My Estate Organizer which has helped many people organize, diarize and communicate their estate affairs.  The whole point of the program is that when somebody dies, typically a lot of questions come up.  Where do you find a copy of the Will?  Who is the financial advisor?  How many financial advisors are there?  How many bank accounts are there?  What were the wishes for a funeral service?  Who needs to be contacted?  Where are the investment statements?

Unfortunately, the one person with all the answers has died.  Having an organized estate will not only help you feel more in control of your personal finances but it will also help the people you love who must make decisions at an emotionally difficult time.

Getting organized is all about gathering information so you can provide answers to all the questions while you are still around to provide them.  When it comes to estate planning, many people don’t know what information to gather and the questions that will be asked when they die.  Here is a guideline of some of the information you need to put together to get organized for estate planning

  • On the first list, you need the names, and your relationship to, all the people or organizations that you would want to give something to after your death.

  • On the second list, you need a list of every asset you have including current values, original costs and the details of any co-owners or joint owners.  This would include bank and investment accounts, land, stocks and bonds, life insurance, loans receivable, business assets, and heirlooms and other valuable items

  • Another list will be key contacts which may include your lawyer, accountant, and financial advisor(s)

  • Another list that is helpful is a list of people you think would need to be contacted when you die.  Don’t take anything for granted.  This might include family relationships, key friends, organizations, etc.

  • Another list might be a list of specific assets that you want to give to specific people.  Often a Will provides general direction for major assets but if you have meaningful heirlooms that you want to give to specific people, then a list of such personal items is very helpful.

  • You should make notes of family relationships, the locations of valuable documents, emergency contact information, and safety deposit box location and key location.

Diarize your affairs – The Estate Binder

Once you have all the information you need, you must put it together in a useful format.  There are many different ways to do this. One of the most consistently successful strategies is having an estate binder.

The estate binder is exactly that – a binder.  In this binder, you should have all of the necessary information, documents and lists to help your family if anything should happen to you.  My Estate Organizer provides an easy solution to the Estate Binder by simply printing a final document that can form the foundation of the estate binder.  Your beneficiaries, executor or family should know where your estate binder is kept so they can find most of the answers that they will need.

Written by Jim Yih

Jim Yih is a Fee Only Advisor, Best Selling Author, and Financial Speaker on wealth, retirement and personal finance. Currently, Jim specializes in putting Financial Education programs into the workplace.

For more information you can follow him on Twitter @JimYih or visit his other websites Group Benefits Online and Advisor Think Box.

3 Responses to Estate Planning starts by getting organized

  1. Estate Planning is a very important part of planning for retirement, but I feel you should stress the idea of having an estate. The article is great but maybe next time you can add some tips on saving for retirement into it this way if things don’t go as planned, you won’t need to touch your estate. Just a thought..

  2. planning is very important in all types of work. A report must be in the format that facilitates the search for another person, with important information highlighted. Great article.

Leave a reply