Insights & News

January 2016
Estate Planning

Your Heirs Will Lose Money If You Don't Take These Steps Now

If your spouse and or other heirs cannot quickly figure out your financial affairs after you pass away or become incapacitated, you won't just leave them frustrated you might leave them with less money. Accounts and other assets could be overlooked ... and financial penalties could be incurred, such as those for not taking required distributions from tax-deferred retirement accounts. State treasuries and other government agencies currently hold more than $32 billion in unclaimed financial assets, including brokerage and bank accounts, insurance policy proceeds and unredeemed savings bonds. Much of these proceeds belonged to now deceased account holders whose heirs were unaware that the accounts existed. In the past, organizing affairs for heirs usually meant little more than telling them where your will and the key to the safe-deposit box were stashed. It has become more complicated in today's world of online accounts automatic withdrawals and bill payments ... and dozens of passwords and PIN codes.

Compiling financial information for heirs can make for a dull day, and many people are reluctant to tackle death related issues, but most people sleep a little easier when the task is complete. It feels good to know that we've done all we can to ensure our families will be able to carry on when we are gone.


Below are seven lists you need to compile that will make your surviving heirs’ lives easier and help preserve your wealth for your family. Create these lists, staple them together, store them in a home safe if you have one or a secure file in your home and update the lists at least once each year. Share the file's name and location with your spouse and multiple dependable heirs to ensure that it is found when needed.

Alternatively, you could ask a trusted family member or two to store copies of your lists for you-but lists held outside your home are inconvenient to update. Warning: A bank safe-deposit box is not an ideal storage place for these lists. Your heirs might be denied fast access to this box after your death. The seven lists...

1 Your financial accounts including investment, bank and credit card accounts. Include the name of each institution, the type of account, the account number, contact phone number and password for each. Explain where account statements and checkbooks are stored.

2 Your financial professionals, including financial planners, insurance agents, estate-planning attorneys, investment advisers and tax preparers. Provide contact information for each and a brief explanation of what he/she does for you and how he could assist heirs.

3 Your recurring bills, such as bills for utilities and insurance, as well as loan payments. Otherwise, your heirs might miss payments triggering penalties, repossessions or policy cancellations.

Make special note of any recurring bills that arrive in your e-mail in-box rather than your mailbox; heirs are particularly likely to miss these. Also list any recurring automatic withdrawals taken directly from your bank accounts so that your heirs don't close these accounts or draw down balances without making other arrangements to pay.

This list of recurring bills and automatic withdrawals also will help your heirs cancel any that are no longer needed. Include a note on this list recommending that after your death your heirs contact providers of any no-longer-needed insurance policies. The heirs should check whether your estate is entitled to a refund for the unused portion of the most recent payment. Refunds can reach into the hundreds, particularly with expensive long-term care insurance policies and any premiums paid annually or semiannually rather than monthly. Your heirs also should ask about refunds when they cancel any prepaid utility accounts.

4 Every e-mail address you use, along with account passwords. This will help your heirs access any online bills and account statements and notify acquaintances of your incapacitation or death.

5 Money that should come in during your life and/or after your death. This includes pensions, annuities, Social Security benefits, veteran’s benefits, payments on loans that you have made and life and disability insurance policy benefits.

6 Minimum annual distributions that you are required to take from your retirement accounts. Each year, note on this list when you take these distributions. Your estate might face steep penalties if your heirs fail to take these distributions from your accounts on your behalf in the year of your death or incapacitation if you have not done so already.

7 Locations of your important documents, including your will and other estate-planning documents, recent tax returns, mortgage and other loan documents, deeds and titles to vehicles and other property, vehicle registrations, insurance contracts, birth certificate, military discharge papers, marriage licenses and divorce decrees. List any safe-deposit boxes as well, along with the location of the keys.

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by FAI Wealth Management), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from FAI Wealth Management. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. FAI Wealth Management is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of FAI Wealth Management's current written disclosure statement discussing our advisory services and fees is available for review upon request.

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