12 Critical Things Your Family Needs to Know

The following is a guest post from Mark Gavagan, author of 12 Critical Things Your Family Needs to Know, a quick and easy-to-use tool for organizing your life and getting your personal & financial affairs in order.

My father died unexpectedly in March of 2003.  He was 67 years old.

Fortunately, we knew he wanted to be cremated, followed by a small graveside service. Not having to guess at his wishes made this terrible time much easier.

Despite my father being fairly organized with a logical filing system, my family spent many grief-filled hours over the following weeks looking for important documents, advisors, insurance, keys and operating instructions (e.g. How do we turn off the alarm system at his house?).

It's amazing how much valuable information resides within each of us. Unfortunately, when we're gone, it's gone.

So how do you make sure that if something happens to you, loved ones left behind won't have to spend hour after hour searching for critical documents or information while agonizing or fighting over what your wishes might have been?

Get organized, discuss your wishes with loved ones, then write everything down!

It's important to document everything even after a clear discussion, because loved ones are often overwhelmed in a crisis and unlikely to remember or all agree in their recollection of what was said.

It's possible to adequately do this on your own, without buying any book (did I really just write that?).  A clearly-labeled notebook is just fine, as long as it's well-organized and you cover all the major issues and important details.

Here are the twelve major areas of critical decisions and information your loved ones need to know:

1. Personal & Family Information.  Just as you'd guess, this is the basic information that might be needed to manage your and/or your spouse's affairs and complete dozens of government, insurance and other forms: name, maiden name, legal address, date and place of birth, location of birth certificate, social security number, driver's license number, and passport number and storage location. Also, include records of any military service (country & branch served, induction date, discharge date, service ID# and the location of DD-214 discharge papers).

2. Family Medical History.  Here is a free workbook-style PDF for outlining your family medical history. Anyone is welcome to print this out for their own personal, non-commercial use. 

Pay particular attention to the “Extended Family's Medical History” pages. Certain illnesses and diseases, such as alcoholism, heart disease, high cholesterol, depression and many cancers, tend to run in families. Share this information with other family members and your doctors since it may be very helpful for early diagnosis or preventative measures.

Once completed, consider placing a photocopy in your travel luggage.

3. Insurance.  For each policy (life, health, disability and long-term care, etc), document the type, insurance company, policy number, policy owner, person(s) covered, benefits, beneficiaries, premium schedules and the location of your records.

This item and the two immediately following will also be very helpful for efficient (i.e. less expensive if you pay by the hour) meetings with financial planners, CPA's, insurance agents, estate planners, or the like.

4. Investments, Bank Accounts & Other Financial Assets.  For each account, list the firm's name, account #, ownership type, owners, account value, investment strategy, beneficiaries and the location of your records.

5. Retirement Plans & Annuities.  For all of these, list the same as for category #4 above. In addition, for each retirement plan, list the type (e.g. 401(k), defined benefit, SEP, etc) and the sponsoring firm's name. For annuities, also list the insurance company, person(s) who receive payout benefits, date the annuity was purchased (“contract date”), date annuity benefit payout benefits were or will be first received, and a description of the payout benefits (e.g. “$2,000 per month for the longer of 10 years or until the death of Ronald G Smith Sr.”).

6. Real Estate.  Note the property's address, whether owned or rented, type of ownership, owners, purchase date & price, all liabilities (primary and secondary mortgages, home equity, liens, etc) against this property (these should be detailed in the #7 “Debts & Liabilities” section below) location of key documents (deed, purchase or rental documents, title insurance, etc), location of important keys, property taxes and fees, description of how important systems (alarm, heating system, electric, cooking gas, water, etc) operate or can be shut-off, and trusted service & maintenance providers (electrical, plumbing, air conditioning, etc).

Other topics that are important but don't fit neatly into any major category are: an inventory of your most important valuables (description, value, location of appraisal), records and strategies related to tax issues, and information about safes, safe deposit boxes and storage units.

7. Debts & Liabilities.  Includes all loans, mortgages, lines of credit, leases charge accounts and credit cards.  For each, list the type and nature of the liability (e.g. “Lisa's undergraduate student loan”), name of the firm owed the money, who is liable, balance, interest rate, payment schedule, payoff date, account number, and the location of your records.

8. Advisors.  Who are the professionals you rely upon for investments, insurance, tax or legal advice, etc? List their names, contact information, areas of expertise, past work done for you and the location of your records.

9. Wills, Trusts & Estate Plans.  Describe all of these (if applicable) including date, place and method of creation, where documents are located, contact info for advisors used. If any of these were created via a “do it yourself” book or software program, also note the full title, publisher 

It is very important that you have a current and valid will.  Otherwise:

• If you die without a valid will (“intestate”), the laws of the state you live in will determine such critical issues as who raises your children and what happens to your assets. Moreover, if you have no will when you die and you have no heirs in the eyes of your state’s law (e.g. living children or parents), all of your assets will become the property of the state, instead of the friends, relatives or charities you would have chosen to inherit them; or  
• If you die and have an out-of-date will, it may be declared invalid if it doesn’t properly meet legal requirements (see “intestate” above); or
• If you die and have an out-of-date will that is valid, it will require that old decisions be carried out, even if they don’t reflect your current wishes or circumstances.  For example, you may end up leaving your entire estate to an ex-spouse instead of your favorite charity (or book author).

Even though the last three items below can be very difficult or awkward to speak about, make sure to talk with your loved ones about your wishes on these issues (and of course, write everything down). This two-way communication gives them a chance to understand your preferences, ask questions, and voice concerns. This step is very important because it lays the groundwork for making sure your wishes are carried-out. Another benefit of these discussions is that you'll uncover their preferences and hopefully motivate them to take the steps you're taking.
 
10. Advance Health Care Directives.  This is especially important. Remember the tragic case of Terri Schiavo, who collapsed at 26 years old and became incapacitated? Her loved ones engaged in a seven year court battle regarding whether or not she should be kept alive via artificial means while in a persistent vegetative state. What would you want?

There are two distinct elements to advance health care directives, though some states combine them into a single document.

First is a “living will,” “health care declaration,” or “directive to physicians,” which is a signed document directed towards health care professionals specifying the kind of care you wish to receive in the event you become incapacitated and cannot communicate on your own behalf.

Second is a “medical power of attorney” or “durable power of attorney for health care,” which is a signed document where you appoint a trusted person (called your health care “agent” or “proxy” or “attorney in fact”) to make medical decisions for you in the event you become incapacitated and cannot communicate on your own behalf.

One other related element is a “durable power of attorney for finances” where a financial agent or proxy is authorized to pay your bills, file insurance claims and conduct other elements of your financial life.

A good resource to learn more and access free advance health care directive forms for each state is 501(c)(3) non-profit NHPCO's website.

11. Organ+ Donation Choices.  Donating organs & tissues when you die may save or enhance the lives of as many as fifty people. There is no cost to you in donating. If you wish, open casket funerals can still take place afterwards. No one is too old or too young, so don’t rule yourself out as a potential donor.  Even those with serious medical conditions often have many healthy and desperately needed organs and tissues to give.

To learn more, including information about how more than two dozen religions regard organ, tissue and whole body donation, and to access your state’s specific donation documents, please visit a website run by the U.S. Dept. of Health and Human Services or Donate Life America, a 501(c)(3) non-profit that links to each state’s specific donation forms (or call 814-782-4920.)

Here is a free .pdf for conveying your wishes regarding organ donation (note: this does not replace an official organ donation form). Anyone is welcome to print this page for their own personal, non-commercial use. 

12. Final Arrangements.  Here are four topics to cover regarding your preferences:

First, how expensive should your overall final arrangements be (either a general dollar range or simply “very inexpensive”, “moderate cost”, “higher priced” or “premium”)? Otherwise, loved ones may feel pressure to spend huge sums of money to “show” how much they care.

Second, outline any military burial/memorial benefits, prearranged or prepaid funeral plans, and membership in any Memorial Society.

Third, do you want your body to be cremated?

Fourth, what is your choice for the final resting place for your body or cremated remains? 

For more consumer advice about funeral purchases, as well as information about your legal rights, read the Federal Trade Commission’s free publication “Funerals: A Consumer Guide”. It’s available on the Web or by calling toll-free 1-877-382-4357.

Lastly, where should all of this documentation be kept and how can you be certain it's secure? This has been the #1 concern of almost every person I've encountered who has begun addressing these issues.

While security is important, along with concerns about losing your information in the event of a flood, fire or other natural disaster, these must be balanced with the need to make sure the information and decisions you've taken time to write down can be accessed when needed.

A bank safe deposit box probably isn't right because it can't be accessed when the bank is closed, or when any owner/lessor of a safe deposit box dies (this depends upon the laws of your state). It might take weeks or even months before the box can be opened, so decisions about organ donation, living wills and final arrangements wouldn't be available when needed.

Overall, one of the best options to consider for storing documentation of your critical decisions and information for your loved ones is small safe or lock box in a location that is hidden, yet accessible.  Make sure the safe of lock box is rated to protect against both fire and water (many are not). Also, make sure one or more trusted loved ones know you've written all of your information and decisions down and are able to gain access quickly in a crisis.

Comments

[Ron]

Wow, most of those things I don't even know myself, don't know how I'm going to pass on that info to anyone.

This must be targeted to those weird organized people that I've read about.

[Rene Jones]

In November 2004 my home was destroyed by a fire. Being a small business owner this was a devastating event that could have ruined my family. What made it even more devastating was when my insurance adjuster asked, “Did I have an inventory of what was lost?” I did not! The irony was, I had been nominated one of the “Top 25 Pros to Know” in the Supply Chain and Logistics industry and specifically on inventory control. However, my experience was in the warehouse and not the living room.

My wife (who was 6 months pregnant with our second son) and I, along with my 4 year old son were forced to stay in a hotel. Because I traveled extensively with my job, often my wife and son would travel with me. It was always a joy for my son to stay in hotels, he felt he was always on vacation. However, this time, after about 2 weeks, my son Gabriel came to me and said, “Daddy I am ready to go home!” But we did not have a home we could return to. He said, “He missed our two dogs Shaka and Baby”, who were left at the burnt out home because the hotel would not accept pets. After he walked away I cried and could not stop crying. Months went by, my son was born premature with serious complications, and I was not able to think about anything as I continuously blamed myself for not being prepared. Later I learned I was going to get burned twice because I did not have that inventory, which was crucial to complete my insurance claim.

I decided to take my inventory knowledge and move it from the warehouse to the living room. I spent my time rebuilding my house, because we could not find a contractor to take such a small job, and developing a program named, “Cover Your Assets”.

[Apex]

Rene,

I am sorry for the difficulty you had with your fire. However, I sincerely hope you make no headway with any legislation requiring people to inventory their homes (I suspect you won't). We don't need government forcing certain behaviors on us and of all the things to force, I would put this one way down the list.

In addition, I do not understand what the big deal is with doing a formal inventory and I fail to see how this could hold up 80% of house rebuilds. If you don't have a formal written down inventory, you go through your house room by room in your mind and write down what was in it. I mean you live in the thing everyday, you know 90% of what is in it. Yes you will forget some things, but likely most things of reasonable value you will remember. I mean if it is the difference between getting my house rebuilt or not I just sit down, do my best and move forward. Perhaps it costs me a few thousand dollars in items I forgot about but really, what other alternatives are there.

Obviously a formal list is better but the problem with formal lists is they are only good for a year or two and then they are out of date again. Do you update yours every year? Perhaps you do due to your experience in the past. I would be willing to bet that if you got most people to do an inventory, more than 95% of them would do it once and never update it again (more than 95% will never do one so its an easy bet that if you forced them to do it once they would never do it again). And after a few years, a memory inventory is better than that.

[FMF]

Rene/Apex --

An even better option IMO:

http://www.freemoneyfinance.com/2008/02/how-i-create-a.html

[Mark]

Rene and Alex,

A shortcut option to home inventory is to upload and email to yourself (and perhaps also a trusted family member as a backup) 8-12 digital photos of each room in your house different angles so you have a record from which to assemble (and prove) your insurance claim.

Remember to photograph any barns, sheds and garages, as well as labels, appraisals and receipts for especially valuable items.

Good luck.

-Mark

[Bellen]

Great post. As we head into our mid 60s we have made known to our children our wishes for funeral/burial. However, we do not have a centralized list/system for disposal of our possessions, lists of accounts, etc.

We have decided to give ourselves a birthday present (in Oct.) of peace of mind. We will make lists, print them out, store them on CDs, send them to the kids and do whatever else is necessary. We live 2 hours from one son and 1200 miles from the other two. Obviously, they will need all the help they can get. Thank you for your insightul post.

[Apex]

Yes, the video or picture option is much more feasible. Who has time to create a list with 1000 items on it.

So to FMF and Mark, how current are your inventories. It seems like a task easily done and left to get stale.

[FMF]

Apex --

Mine is a couple years old. I need to update it.

[funny about Money]

Thanks! You just reminded me that I set mine down in the middle of organizing information, wandered off, and got permanently distracted. Now to spend the rest of the afternoon finishing that project!

Rene's story is heart-breaking. She reminds us that in addition to letting our families know where all our assets are, how to handle the bills, what our end-of-life wishes are, and how to dispose of the remains, we should inventory our homes, photograph everything, and store that information off site. My son is getting a copy of all this data.

[Andie]

Another thing to pass along are your logins and passwords to your accounts online. My husband and I are starting to catalog our many many logins and passwords on an encrypted truecrypt file.

[MS. MELLY]

My mother got sick in April of this year and had to be hospitalized. She ended up having two surgeries a month and half apart at one hospital and ended up in ICU. They called in other doctors, nurses and were giving her the wrong medicines which caused her to have a stroke. She ended up having Cdep, a staff infection, phneomonia and cellulitis. She couldn't even walk. They ignored her in ICU most of the time and wouldn't feed her. Her adult children helped her all of the time and questioned the doctors and nurses about what was going on, but, still couldn't get a straight answer. We found out that her appendix had burst which caused her to have emergency surgery and wasn't called until it surgery was over with. My mother, 84, was worse off at that hospital before she went in. They wouldn't even bathe her or answer her button calls for the nurse. She was then transferred to a Nursing home in Illinois near her home for rehabilitation where she was abused and mistreated her.
She was there not even a week and then was transported by chopper to another hospital in Springfield in the ICU dept. We found out that her kidneys were shutting down because of lack of water intake and that the cellutitis in her arm was so badly bruised and infected, her arm was swollen three times the size it should have been. She still had a staff infection, Cdep and also pancreatitis. She was drugged up from the nursing home with other medication which she shouldn't have been on and that we weren't informed about either. Thirteen medications, I couldn't believe it. After being in ICU for two weeks, she started feeling better and the doctors there said she was going to be fine and needed to go for therapy and help her walk again. But, my older brother and two sisters took her back to the same nursing home as before and they mistreated her again. My younger brother and I went to see her and saw what was happening to my mother. It was terrible! I took picture's of my mothers room. It was trashed, smelled like urine and my mother kept crying and telling me to take her home. I was told that my mom was doing alright, but, I knew better. She wasn't being fed and they weren't giving her water. She layed in her own urine bedsheets and feces on her clothes for two days. It was just horrrible. She couldn't walk, her left foot was turning blue, because they had dropped her twice on the floor instead of using the straps to hold people up; it was three aides lifting her up under her arms as I heard my mother screaming out and crying for help. I couldn't stand the them torturing my mother anymore. I called and made a complaint with the administrator of the nursing home, threatened the nursing staff and the aides. They were really scared. My mom was released and put into a hospital nearby where they said her foot was so badly bruised, it had turned into ganggreen; plus her kidneys had shutdown again. There was no hope for my mother anymore. It was only a matter of time. April thru June of this year 2009 were the most horrible months for my me, my mother and my family. My mother passed away on June 23, 2009. Now she is with my Dad. I miss her dearly. She didn't deserve to be treated this way at any time. She was a strong person, very talkative and alert, paid her own bills, etc. We had all just finished building her a new porch on Easter weekend. And she went into the hospital just a few days later. Mom never got to enjoy her new porch at all. I love you mom, always where ever you are.

[MS. MELLY]

This is Ms. Melly again adding more info that I forgot which is very important. My older brother and sister's decided to take over everything while my mother was in the nursing home. She had made out before her illness occurred, a Wish Book" notarized, but, with no Will. This wish book included all her wishes for burial arrangements, dividing up what she had left in the house to her seven grown children and then sell the house. None of this happened. The oldest three immediately sold everything in the house without the rest of us knowing anything, didn't want us around and told us to stay out of the house. They hired an attorney and took us to court for the oldest brother to become adminstor of moms estate. Myself and three other brother's couldn't afford an attorney, but, we did the best we could to try and make one of my brother's the adminstor. It was a cruel battle in court and their attorney even made accusations against my brother; the judge didn't even give him a chance to speak for more than ten minutes. He awarded my older brother as administor. But, told my older brother and his attorney that they had 60 days to come up with everything that was sold and for how much it was sold for. So far, we are still not allowed in our mother's house, the other three are still not talking to us and they didn't even contact us for moms burial date. This is simply uncalled for and they are treating us like we don't exist. I never would've thought that our own family would turn on family members like this.
I do know that the day before mom died, she told my younger brother's that she didn't like what was going on with her house and that the two older girls were doing her wrong. I guess she knew all along what was happening and was not pleased. Poor mom made a disgusted face about the whole thing. I know now that mom and dad are watching over us and they are not happy at all about how things are being dealt with. Not the way that they wanted them to be. It's so sad as all seven us use to be close and now we're not.

[Beverly Brennan]

Please consider revising section 9 of this post, and recommend that people discuss these issues with an attorney in their state. You are providing misinformation here. For example, this:

if you have no will when you die and you have no heirs in the eyes of your state’s law (e.g. living children or parents), all of your assets will become the property of the state,

is simply not true, although it's a common misconception and one which I am constantly explaining to my own clients. There are similar problems with your advice re: "out-of-date wills." Please leave the legal advice-giving to the lawyers. Yes, I am one.

[Sarah]

Please enter me in this drawing.