How to Prepare Your Financial Information for When You Die

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Making a good list of passwords and everything else about your financial life can spare your family much work and heartache.



Photo:

Martin Tognola

I have been meaning to organize my records and personal information for my wife, just in case something happens to me. Can you recommend any resources—any planners or workbooks—to get me started?

I think this is one of the most important financial tasks that any individual, retired or otherwise, should tackle—spelling out “last instructions” if you become incapacitated or die. In doing so, you spare your family much work and heartache.

I assume you already have an estate plan with all the necessary documents (a will, power of attorney, etc.). If so, you can move to, first, writing down the steps your family should take if something happens to you and, second, listing all the pieces and people—assets, accounts, insurance policies, bills, debts, credit cards, passwords, bankers, lawyers and the like—that are part of your financial life.

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We’ll begin with “free.” If you search online (example: what my family needs to know free pdf), you’ll find numerous worksheets that you can print at no cost and fill out. In particular, check out Everplans, which offers (in addition to an online planning service) more than a dozen free checklists to get you started. And if you’re comfortable with Excel, you can easily create files that list accounts, investments, contacts, etc.

A Final Checklist

Asked to identify the biggest benefits of having one’s affairs in order—such as creating a will or keeping documents organized—the following percentages of surveyed adults age 55 and older said:

Relieving the

burden on my

loved ones

43%

Having some

control over medical interventions

19

Being the one to decide what happens to my belongings

15

Being sure that my financial situation is managed properly

14

Having some

control over my

end of life and legacy

9

Source: Merrill Lynch Wealth Management/Age Wave ‘Leaving a Legacy: A Lasting Gift to Loved Ones’ 2019

If you choose to buy a book, numerous titles are available, from the straightforward (“My Life Directory”) to the cheeky (“I’m Dead. Now What?”). Yes, you’re paying, for the most part, for blank pages. But again, that’s the point: You need to get your instructions and information down on paper. (Or in your computer. More in a moment.)

One of my favorite books: “Get It Together: Organize Your Records So Your Family Won’t Have To” by Melanie Cullen with Shae Irving. Don’t be put off by the length: more than 400 pages. The authors cover just about everything a caretaker or survivor might need to know. (See, for instance, the section that focuses on “pets and livestock.”)

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How do you compile “what if” information for your family, and what do you include? Join the conversation below.

Then there’s the online route, where you can store your instructions, information and records on a website or app, typically for a one-time or recurring fee. These sites and services fall under various headings: estate-planning organizers, end-of-life planners, document storage and “death apps.” A favorite: Everplans (noted above), which describes itself as a “digital vault.” Cost: $75 a year. Other services include: My Life & Wishes, Final Roadmap and LifeSite.

For my part, I’ve taken a low-tech approach. I have a binder with (I hope) everything that my wife and our daughters need to know. I’ve also put the contents on two thumb drives, one for my wife in our safe-deposit box, and one for our youngest daughter, who is also our executor. I update all this material at least once a year. When I started this project, it took me a couple of months (an hour here, an hour there) to assemble everything. But if something happens to me, my family—at least when it comes to our finances—shouldn’t miss a beat.

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In a recent column, you wrote about the health of the Social Security program. What about Medicare? Where does that stand?

Unfortunately, Medicare is in worse shape than Social Security.

In April, trustees for Social Security and Medicare said Social Security beneficiaries, starting in 2035, will receive about 76% of their scheduled payouts, unless Congress acts before then to beef up the program’s finances. At the same time, the trustees said Medicare’s hospital-insurance trust fund will be depleted in 2026, after which the government will be able to cover about 90% of scheduled benefits.

Worse, the Congressional Budget Office in September estimated that the hospital trust fund could be depleted as soon as 2024, given a drop in payroll-tax revenue tied to the Covid pandemic. (The trustees report in April didn’t account for the impact of the virus.)

And speaking of Medicare…the Kaiser Family Foundation, a nonprofit that specializes in health-policy analysis, has a good summary of where Donald Trump and Joe Biden stand on a dozen health-care issues, including Medicare and its future.

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I have a question about health-care proxies. If a person doesn’t have a family member who can serve as a proxy, whom does one usually appoint?

Actually, the issue here is trust.

Yes, it’s typical, and easy, to name a family member as your health-care proxy, a person who can make decisions about your medical care if you’re unable to do so. But the most important consideration in naming a proxy shouldn’t be family ties; rather, what’s most important is having a person—a close friend, a co-worker, a colleague, a neighbor—who understands your wishes and can be trusted to carry them out.

The Conversation Project, a Boston-based initiative that helps individuals and families tackle issues involving end-of-life care, has a terrific guide just for this purpose. Named, aptly, “Who Will Speak for You? How to Choose and Be a Health Care Proxy,” this 16-page booklet explains clearly what a proxy is and does and what you and your proxy should talk through long before you might need her/him.

Most important, I applaud your effort to name a proxy. A study published in 2017 in Health Affairs found that only 46% of people age 65 and older had some type of advance health-care directive. I hope your question encourages more people to take the same step.

Mr. Ruffenach is a former reporter and editor for The Wall Street Journal. His column examines financial issues for those thinking about, planning and living their retirement. Send questions and comments to askencore@wsj.com.

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