As I mentioned in Part 1 of this article, a recent extensive survey indicated that most Americans have no estate plan at all. Part 1 dealt with planning for the immediate concern after one’s death: disposition of your remains, memorial service, obituary and other notifications. This Part focuses more on some meaningful issues which can be handled after those mentioned in Part 1 are resolved, but they are just as important, and can also cause a family division. Further, avoiding the issues described below and leaving their resolution to our survivors is a burden no one seeks.
Before I begin, I recommend that you review my blog article posted on our website on December 5, 2012 about a Legacy Letter. The article is entitled “The Most Valuable Inheritance”, and discusses leaving a personal history for our descendants to treasure.
Your Tangible Personal Effects
After 35 years of estate planning, I’m still perplexed by the fixation some of us have with our parents’ and grandparents’ tangible personal property (meaning things one can lift and remove, such as jewelry, art, clothing, furniture and furnishings). Some of these items, such as jewelry and art, having significant monetary value and often dividing them unevenly among children can result in a rather large discrepancy in shares, but nonetheless this should be addressed before we die. Other articles, such as clothing and furniture, have little value, yet sometimes our survivors can have tremendous emotional trauma based upon who gets even these things.
I have found very often that the most daunting task which siblings face is dividing up the tangible personal effects of their deceased parents, simply because money can be divided easily and real property can be put into a partnership or sold. But one can’t divide up our great-great-grandfather’s snuff box or our great-great-grandmother’s wedding band. Perhaps the value of these items is that they can be held, seen and felt, which cannot be said of the former owners.
Too often, aging parents don’t deal with this division because they fear being pressured by one or more children or being the source of dissent among their children (something, in my experience, frail seniors avoid more than the Plague). But after one’s death, that difficulty is even more conducive of strife, simply because the parent isn’t there to make the hard decisions or to confirm that he or she had promised one item or another to a particular child.
One of my clients thought she was fulfilling this need by putting Post-It® Notes on the back or bottom of each item in her condominium with the name of one of her five children. Sadly, one child who visited her mother discovered this and switched the Notes to her favor !!
If you are fearful of stirring up a fight, and you have particular items you wish to go to specific people, make a list and sign and date it. If you’re not afraid to confront your children on this subject, then read the list to them (all of them at once). By planning this, you will be giving your children a tremendous advantage on the challenge of saving their relationships with each other after your death. As you will readily agree, that is the most valuable legacy you can give to them.
Credit Cards, Online Accounts, Frequent Flyer Mileage
Often, children of aging parents share a credit card with them (which the parents often pay). In this day of identity theft, it is imperative that all credit cards be cancelled as soon as possible after the death of the holder. Identity thieves who hack the customer data of major retailers use their computers to actually scour newspaper obituaries to find names of the recently departed and cross-reference them with vendor accounts. With the few names they find matched to credit card accounts they can then make online purchases without anyone discovering them until someone actually reviews the credit card bills, well after the purchased goods have been delivered (if the credit card company has “fraud alert” function, they’re going to be calling a dead customer to alert them). Sometimes the credit card companies will require a copy of the Death Certificate (which is why you should get many).
Similarly, PayPal and other online accounts should be closed by contacting them and asking for instructions (PayPal requires a letter and a Death Certificate). Otherwise, those funds are lost.
Needless to add, all of this information should be available to your survivors (see the Death Memo discussion below).
Finally, different airlines have different rules regarding inheriting and accessing the mileage accounts of deceased members. Be sure to go to their respective websites to find out whether transfers of this nature are allowed and, further, what will be required by the airline (some of whom require an express declaration in your Will regarding your mileage account).
The Death Memo
In many relationships, one spouse or a single parent or one of the children (on behalf of an aging or infirm parent) keeps up with all of the bank and brokerage accounts, credit cards, memberships, insurance policies, pension benefits, bills and other facets of our financial lives, often to the willing ignorance of the other spouse or the children. These days we have even more private information to keep to ourselves, such as website passwords and personal identification number (PIN’s). Some of us keep most of that information in our heads, and that knowledge is lost when our heads can no longer be accessed.
It is indeed a herculean task to put all of that information into a single memo, including contact information for all of our advisors, account numbers, insurance (life, auto and homeowners) policy numbers, passwords, etc., and I can only recommend to you that you do a little of it each time you sit at your computer. I found that each time a statement comes in the mail, I add the information for that account to what I call my “Death Memo”. As a former CPA, I take on this chunk of my married life division of labor, but I view as perhaps the most crucial part of my estate planning having a single document available so that my surviving wife will be more likely to bless my memory should I be the first to go.
Of course, much all of this information (other than passwords and PIN’s) can be obtained by just watching the mail coming in after someone dies, but the advantage of having all of that information available immediately is the difference between a sweet mourning memory, and the drudgery of searching for information for months after the memorial service.
At least, with modern word processing, changes to the Death Memo are easy updates when we change our empires (or passwords), as opposed to redoing the entire task anew.
Let’s not forget that the information in the Death Memo is often extremely personal and precious so that it could cause great damage if in the hands of unscrupulous users. It is obvious, therefore, that this Memo should be secured in some fashion that it will only be accessed by the appropriate reader when the time comes to use it.
Having a deceased person’s comprehensive Death Memo is like having GPS in the Sahara Desert; at least you won’t doom your survivors to aimless wandering in the wilderness.