News, Quotes, Companies, Videos
Saturday, July 2, 2011 As of 12:00 AM
New York
SEARCH
77º | 68º
WEEKEND INVESTOR
U.S. Edition Home
World
U.S.
Today's Paper
New York
Video
Blogs
Business
Family Finances
Journal Community
Markets
Investing
Tech
Subscribe
Personal Finance
Retirement Planning
Taxes
Life & Culture
Columns & Blogs
1 of 12
TOP STORIES IN
Personal
TOP STORIES IN
Finance
Personal
WEEKEND
INVESTOR
Finance
401(k) Law Undercuts Savings
401(k) Law Undercuts Savings
Opinion
How-To Guide
2 of 12
New Rules to Make It Easier to
Get Credit Scores
New Rules to Make It Easier to
Get Credit Scores
JULY 2, 2011
Careers
Real Estate
Log In
Small Business
SmartMoney.com
3 of 12
PLAY
Wealth: Hedging
with Gold,
International
Picks
Wealth: Hedging
with Gold,
International Picks
Read Th
You Die
Read Th
You Die
The 25 Documents You Need Before You Die
Interactive Graphics
Article
Email
Print
Save This
Comments (68)
Like
2K
MORE IN PERSONAL FINANCE »
+ More
Text
By SAABIRA CHAUDHURI
It
enoughCHAUDHURI
simply to sign a bunch of papers establishing an estate plan and other end-ofByisn't
SAABIRA
life instructions. You also have to make your heirs aware of them and leave the documents
where they can find them.
Consider: At least 10 states have been investigating whether some of the country's largest
insurers are failing to pay out unclaimed life policies to beneficiaries. California and Florida
have held public hearings on the issue in recent weeks.
Insurers say they are behaving lawfully.
Under policy contracts, they aren't required
to take steps to determine if a policyholder is
still alive, but instead pay a claim when
beneficiaries come forward.
You can avoid such problems by securing
important documents and telling your family
where they are stored.
View Interactive
Tim Goldman
Jean Parr is grateful that her mother
obsessed about the subject. "I really didn't
want to think about it," says Ms. Parr, 54
years old, a manager at the American
Chemical Society in Washington. But when
her mom died in 2005, she knew exactly
where to look for the will, the key to a safedeposit box and documents indicating her
mother had paid and arranged for her own
funeral.
The financial consequences of failing to keep your documents in order can be significant.
According to the National Association of Unclaimed Property Administrators, state treasurers
currently hold $32.9 billion in unclaimed bank accounts and other assets. (You can search for
unclaimed assets at MissingMoney.com .)
Most experts recommend creating a comprehensive folder of documents that family members
can access in case of an emergency, so they aren't left scrambling to find and organize a
hodgepodge of disparate bank accounts, insurance policies and brokerage accounts.
You can store the documents with your attorney, lock them away in a safe-deposit box or
keep them at home in a fireproof safe that someone else knows the combination to.
That isn't to say you should keep everything. Sometimes people hold onto so many papers
that loved ones can't find the important ones easily.
In 2008, Jane Bissler, a counselor in Kent,
Ohio, approached her then-87-year-old
mother about organizing her documents.
Because her mom was a widow with
relatively simple finances and two homes,
Ms. Bissler, 57, says she figured it would be
a relatively simple task.
View Full Image
Tim Goldman
From SmartMoney
Instead, it took an entire year for Ms. Bissler
and her mother to go through all of her
papers, which included documents from
eight bank accounts, utility bills from the
1950s and reams of canceled checks.
How to Manage Important Documents
From SmartMoney
The two of them pared down the stash from
four four-drawer filing cabinets to one twoHow to Choose Beneficiaries
drawer cabinet, shredding anything
extraneous. Ms. Bissler and her mother
visited banks and brokerages to ensure she was listed on all of her mother's accounts. Her
mother died in May 2009.
How to Write a Will
"It would have been a total nightmare if we hadn't gone through it all with her," Ms. Bissler
says. "It was that Depression-era stuff where you keep everything and hide other things." Ms.
Bissler estimates that having the documents organized ahead of time spared them from
ordering an additional 15 copies of the death certificate and "years" of time.
Here is a rundown of the most important documents you'll need to have signed, sealed and
delivered. You should start collecting these as soon as possible and update them every few
years to reflect changes in assets and preferences. Some—such as copies of tax returns or
recent child-support payments—need to be updated more often than others.
Available to WSJ.com Subscribers
Available to WSJ.com Subscribers
Chasing Fraud,
Then Chasing Cash
Chasing Fraud,
It's easier for regulators to
Then
get theirChasing
man thanCash
it is to
Canada Has Lots of
Oil; Does the U.S.
Want
It? Has Lots of
Canada
Oil; Does the U.S.
Want It?
get their money. Since late
2005, the SEC and CFTC
have ordered $12.3 billion
in penalties for alleged
wrongdoing. But more than
$4.5 billion hasn't been paid
yet.
How Tweaking
Benefits Would Work
How Tweaking
If Social Security is going to
Benefits
Work
be changedWould
as part of
the
deficit deal now being
negotiated, the change
most likely won't come in
the form of a direct cut in
benefits to save money, but
rather from a rejiggered
formula to determine how
fast those benefits go up
over time.
Groupon's Boston
Problem: Copycats
Groupon's Boston
Problem: Copycats
The Essentials
An original will is the most important document to keep on file.
A will allows you to dictate who inherits your assets and, if your children are underage, their
guardians. Dying without a will means losing control of how your assets are distributed.
Instead, state law will determine what happens.
Wills are subject to probate—legal proceedings that take inventory, make appraisals of
property, settle outstanding debt and distribute remaining assets. Not having an original
document means this already-onerous process could be much more of an ordeal, since family
members can challenge a copy of a will in court.
Rick Law, founder of estate-planning firm Law ElderLaw LLP in Aurora, Ill., says estate
planners increasingly recommend revocable trusts in addition to wills, since they are more
private and harder to dispute. "Every will is like a compass that points toward the closest
courthouse," he says.
A revocable living trust can be changed anytime during your lifetime. After you transfer
ownership of various assets to the trust, you can serve as the trustee on behalf of
beneficiaries you designate. Provided you do so, there aren't any ongoing fees.
If your family can't find the original trust documents, you are "basically setting your estate up
for litigation," says Duncan Moseley, vice president of Sanders Financial Management in
Atlanta.
A "letter of instruction" can be a useful supplement to a will, though it doesn't hold legal
weight. It is a good way to make sure your executor has the names and contact information of
your attorneys, accountants and financial advisers. While the will should be stored with your
attorney or in a courthouse, the letter of instruction should be more readily accessible,
particularly if it contains instructions on funeral arrangements.
Also, make sure your heirs have access to a durable financial power-of-attorney form. Without
it, no one can make financial decisions on your behalf in the event that you are incapacitated.
Recent Columns
The 25 Documents You Need Before You Die
Recent Columns
Stock
Gets Trickier
The 25Picking
Documents
You Need Before You Die
Beyond
the
Money-Market
Stock Picking Gets Trickier Fund
Beyond the Money-Market Fund
Video
Video
June's Most
Notable Homes in
June's
New
York
Most
Notable Homes in
2:15
New York
AM Report: Higher
Jobless Rate May
AM Report:
Thwart
Recovery
Higher
Jobless Rate May
20:19
Thwart Recovery
News Hub: Shuttle
Launch Is a Go!
News Hub: Shuttle
4:29
Launch Is a Go!
More in Personal Finance
The New Rules of Estate Planning
More in Personal Finance
Can
Fidelity
Build
a Better
Bond Ladder?
The New
Rules
of Estate
Planning
Rules
Aim toBuild
Increase
Pensions'
Can Fidelity
a Better
Bond Transparency
Ladder?
Should
YoutoSave
For Your
Kids' Retirement?
Rules Aim
Increase
Pensions'
Transparency
Proof of Ownership
401(k)
Savings
Should Law
You Undercuts
Save For Your
Kids' Retirement?
You should keep documentation of housing and land ownership, cemetery plots, vehicles,
stock certificates and savings bonds; any partnership or corporate operating agreements; and
a list of brokerage and escrow mortgage accounts.
401(k) Law Undercuts Savings
Most Popular
Emailed
Read Popular
Most
Video
Commented
If you don't tell your family that you own such assets, there is a chance they never will find
out. Mr. Moseley says in such an event, clients must perform their own detective work,
watching the mail for real-estate tax bills or combing bank accounts for interest payments, for
example.
File any documents that list loans you have made to others, since they could be included as
assets in an estate. Similarly, keep a list of any debts you owe to avoid surprising your family.
Wills and living trusts generally are drafted to include provisions for how debts should be
settled, and creditors have a stipulated period of time in which to file a claim against the
estate.
Make the most recent three years of tax returns available, too. "Looking at last year's returns
offers a snapshot of what assets we should be looking for this year," says Lesley Moss
Mamdouhi, a principal at estate-law firm Oram & Moss in Chevy Chase, Md. This also will
help your personal representative file a final income-tax and estate return and, if necessary, a
revocable-trust return.
Bank Accounts
Mr. Law recommends sharing a list of all accounts and online log-in information with your
family so they can notify the bank of your death. "If nobody ever takes any more out or puts
money in, it becomes a dormant account and then becomes the property of the state," he
says.
Be sure to list any safe-deposit boxes you own, register your spouse or child's name with the
bank and ask them to sign the registration document so they can have access without
securing a court order.
Health-Care Confidential
Possibly the most important health-care document to fill out in advance is a durable healthcare power-of-attorney form. This allows your designee to make health-care decisions on your
behalf if you are incapacitated. The document should be compliant with federal healthinformation privacy laws, so that doctors, hospitals and insurance companies can speak with
your designee. You may also need to fill out an Authorization to Release Protected Healthcare
Information form.
If you are incapacitated and your family can't locate a health-care power of attorney, they will
have to go to court to get a guardian appointed.
Porter Storey, executive vice president of the American Academy of Hospice and Palliative
Medicine in Glenview, Ill., says it isn't enough to establish a health-care power of attorney
unless you have explained to your designee how you would like to be treated in case of
incapacity. He also recommends writing a living will detailing your wishes.
After Diane Dimond's mother had a series of strokes in 2006, Ms. Dimond knew there was a
signed living will tucked away in a safe at home. Ms. Dimond, 58 and living in New York,
recalls the Sunday she watched her mother in a coma and was able to fulfill her wishes never
to be kept on external life support. "It was gut-wrenching," she says, "but I took the physician
aside and said, 'I want to take her home.'" Having her mother's living will enabled Ms. Dimond
to do just that.
The living will and the power of attorney constitute what are called "advance directives"; some
states consolidate these into a single form. (AARP offers a state-by-state listing of advancedirective forms on its website.) Terminally ill patients may wish to have their doctors sign a donot-resuscitate order.
Certain companies, such as Advance Choice Inc.'s DocuBank, will keep copies of health-care
documents for a fee. Subscribers get a wallet-sized card and, in case of an emergency, a
hospital will call DocuBank, which will fax over the information.
Life Insurance and Retirement Accounts
Copies of life-insurance policies are among the most important documents for your family to
have. Family members need to know the name of the carrier, the policy number and the
agent associated with the policy.
Be especially careful with life-insurance policies granted by an employer upon your retirement,
since those are the kind that financial planners most often miss, says David Peterson, CEO of
Denver-based Peak Capital Investment Services. New York state alone is holding more than
$400 million in life-insurance-related payments that have gone unclaimed since 2000,
according to the state comptroller's office.
1.
How Can Jeans Cost $300?
2.
401(k) Law Undercuts Savings
3.
401(k)Readies
Law Undercuts
Savings
New iPhone
Apple
4.
Apple Readies
New iPhone
Google
Makes Facebook
Look Socially Awkward
5.
Google
Makes
Look
Socially Awkward
Ganging
UpFacebook
on Internet
Pirates
How Can Jeans Cost $300?
Ganging Up on Internet Pirates
Most Read Articles Feed
Estate planners also recommend that you draw up a list of pensions, annuities, individual
retirement accounts and 401(k)s for your spouse and children.
An IRA is considered dormant or unclaimed if no withdrawal has been made by age 70½.
According to the National Association of Unclaimed Property Administrators, tens of millions of
dollars languish in unclaimed IRAs every year.
If your heirs don't know about these accounts, they won't be able to lay claim to them, and the
money could languish. The U.S. Department of Labor estimates that each year tens of
thousands of workers fail to claim or roll over $850 million in 401(k) assets. You can track
unclaimed pensions, 401(k)s and IRAs at Unclaimed.com.
Marriage and Divorce
Ensure your spouse knows where you have stored your marriage license. Mary Cay Corr, now
74 and living in Raleigh-Durham, N.C., couldn't locate hers when her husband died. "I had to
write to New York, where we got married, and pay for a new marriage license to prove that I
had been married to my husband before I could claim anything," she says.
For divorced people, it is important to leave behind the divorce judgment and decree or, if the
case was settled without going to court, the stipulation agreement, says Linda Lea Viken,
president of the American Academy of Matrimonial Lawyers in Chicago. These documents lay
out child support, alimony and property settlements, and also may list the division of
investment and retirement accounts.
Include the distribution sheet listing bank-account numbers that accompanied the settlement to
avoid disputes about ownership or payments due. Also include a copy of the most recent
child-support payment order. In the majority of states, the obligation to pay child support still
exists after death.
Ms. Viken also recommends filing copies of any life-insurance papers. In many states if you
have a policy that benefits your children, it can be set off against the ongoing child support.
You also should include a copy of the "qualified domestic-relations order," which can prove
your spouse received a share of your retirement accounts.
—Mary Pilon contributed to this article.
Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com
MORE IN PERSONAL FINANCE
Email
Printer Friendly
Order Reprints
Share:
Like
Send
2,399 people like this.
Hot Stock Pick - OMVS
Solar Automotive Technology. Investment, Stocks, Trade.
www.OnTheMoveSystems.com
Search for obituaries
Search millions of obituaries in 1,900 newspapers. Updated weekly
www.ancestry.com
Elder Law Attorney
Medicaid and Estate Planning for Long Term Care - Free Consultation
www.victorandassociates.com
Don’t Be Shy. Try Forex.
Get to know GFT. Check it out our Risk Free Practice Account.
GFTforex.com
Add a Comment
JOURNAL COMMUNITY
We welcome your thoughtful comments. Please comply with our Community
rules. All comments will display your real name.
Want to participate in the discussion?
REGISTER FOR FREE
Or log in or become a subscriber now for complete Journal access.
Track replies to my comment
CLEAR
POST
Go to Comments tab
Share articles and post your comments
on Facebook What's this?
Related and Recommended
Login with Facebook
Elsewhere on the Web
Content from Sponsors What's This?
Related and Recommended
Before You Become an
Has Your Housing
Market Hit Bottom?
Expat...
Before You Become an
Has Your Housing
Expat...
Hit
Bottom?
Stashing
Cash
Weighing Your Options forMarket
Goldman-Libya
Weighing
Eyes on Your
Options forDealings
Stashing Cash
Want
Job?
Become a Landlord.
Eyesa on
Goldman-Libya
Dealings
Read
Before
YouaDie
Want This
a Job?
Become
Landlord.
Stray
Cat Strut:
Woman
Beats IRS
Read This
Before
You Die
Take
Chances,
GenBeats
X
Stray Some
Cat Strut:
Woman
IRS
A
College-Savings
Strategy
Take
Some Chances,
Gen X That Could Flunk Out
The
25 DocumentsStrategy
You Need
Before
You
Die Out
A College-Savings
That
Could
Flunk
Why
DoDocuments
We Fight? You
Blame
It on
Our Brains.
The 25
Need
Before
You Die
Planning
forFight?
Divorce
Why Do We
Blame It on Our Brains.
Planning for Divorce
Elsewhere on the Web
AOL.COM
Mr. Inappropriate and
15 Other Characters
Mr. Inappropriate
You'll
Meet in Yourand
15 Other Characters
Career
You'll Meet in Your
FOOL.COM
Career
Bill Gates Says We're
All Doomed
Bill Gates Says We're
AOL.COM
All Doomed
Airbus 'Invisible'
Concept Plane
Airbus 'Invisible'
Revealed
As Future of
Concept Plane
Commercial
Flight
Revealed As Future of
FOOL.COM
Commercial Flight
Bill Gates
Flabbergasted by
Bill Gates
Gmail
Flabbergasted by
AOL.COM
Gmail
World's 10 Most
Dangerous Cities
World's 10 Most
(VIDEO)
Dangerous Cities
FOOL.COM
(VIDEO)
Can You Retire on
$75,000?
Can You Retire on
AOL.COM
$75,000?
13 Perks of Being a
30-plus Student
13 Perks of Being a
30-plus Student
Editors' Picks
Editors' Picks
Canada Has Lots of Oil;
Does the U.S. Want It?
Canada Has Lots of Oil;
Does the U.S. Want It?
The Taming of the Fans
The Taming of the Fans
Harry Potter and the
Twofer
Harry Potter and the
Twofer
Errol Morris on Tabloid
Journalism
Errol Morris on Tabloid
Journalism
Lab-Made Trachea Saves
Man
Lab-Made Trachea Saves
Man
BACK TO TOP
WSJ.com Account:
My Account
About:
News Licensing
WSJ.com:
Site Map
Tools & Formats:
Today's Paper
My Account
News Licensing
Site Map
Today's Paper
Subscriber Billing Info
Reprints
Home
Video Center
WSJ.com
Advertising
World
Graphics
Marketwatch.com
Classifieds
U.S.
Columns
Barrons.com
Register for Free
Advertise Locally
New York
Blogs
SmartMoney.com
Subscribe to WSJ.com
Conferences
Business
Topics
AllThingsD.com
Sign up for WSJ Professional
About Dow Jones
Markets
Guides
Privacy Policy - Updated
Market Data
Alerts
FINS: Finance, IT jobs, Sales
jobs
Subscriber Agreement &
Terms of Use - Updated
Tech
Newsletters
BigCharts.com
Mobile
Virtual Stock Exchange
Copyright Policy
Personal Finance
Life & Culture
Tablet Edition
WSJ Radio
Opinion
Podcasts
Professor Journal
Create an Account:
Help & Information Center:
Help
Customer Service
Contact Us
Jobs at WSJ.com
Global Support
Autos
RSS Feeds
New on WSJ.com
Careers
Take a Tour
Real Estate
WSJ on Twitter
Print Subscriber Services
Small Business
WSJ on Facebook
Student Journal
WSJ on Foursquare
Journal Community
Corrections
My Journal
SafeHouse - Send Us
Information
Portfolio
WSJ Digital Downloads
Digital Network
WSJ U.S. Edition
WSJ Asia Edition
WSJ Europe Edition
WSJ India Page
Foreign Language Editions:
WSJ Chinese
WSJ Japanese
WSJ Portuguese
WSJ Spanish
Copyright ©2011 Dow Jones & Company, Inc. All Rights Reserved