More Than Just Your Will – Part 2

A Death Dossier is a term many legal and estate planning professionals use to describe a portfolio containing the financial particulars, last wishes, insurance information and asset documentation of an adult. The name may be rather sinister in nature, but digging deeper we find the information held within a Death Dossier is actually quite important for both the deceased and those left behind. In part one of this series we discussed inclusion of the Last Will and Testament and proof of ownership for all assets in the Death Dossier.

With an original copy of a will readily available, it makes the probate process go much more smoothly as there is little chance of anyone challenging the validity of it. In Part 1, we also discussed the importance of including proof of ownership for all assets. An asset can be one of two things in the context of a Death Dossier: a durable good which has not fully depreciated to a value of zero, and a business entity in which economic benefits may still be produced. Thus, any physical property such as land, vehicles, jewelry, antiques, art, and collectibles are considered assets. Business partnership documents are assets, as are operating agreements pertaining to a business, stock certificates, bonds and so on. Now let’s move on to the next two components of a well-stocked Death Dossier.

Financial Accounts
No one really knows our financial particulars like we do. We know how much income we have each month and year, as well as how many accounts we have and at what financial institutions. If our trustee doesn’t have all bank account and safe deposit box information made available to them, they cannot claim financial assets. If bank accounts are left untouched, they become dormant.

In the US, if a checking account has been inactive for 12 months, it will be converted to a savings account and charged a dormant fee (24 months for savings account). When the dormant period is several years (actual time period varies between states), funds are transferred to the state government – a process called Escheat. If a family member attempts to reclaim monies after Escheat has taken place, they need to go through the appropriate governmental agency. The same is true for safe deposit boxes.

Best Scenario: Include a list of account and safe deposit box numbers, where they are located, and all online log-in information. Register your next of kin or trustee with the bank so they can have access to the safe deposit boxes and accounts without having to get a court order.

Retirement Accountsr
This is a separate category because it doesn’t apply to everyone, which further emphasizes the point that a Death Dossier is for EVERYONE who has reached the age of majority (as determined by the state), not just those already sitting in the lap of luxurious retirement. However, for those that have reached that wonderful time of life, let’s be sure all those important investments made during the working years are documented and usable after we are gone.

Let’s first cover the Individual Retirement Account or IRA. As a form of retirement savings fund, the IRA is meant to provide a tax-free source of income for taxpayers after retirement. However, the account owner must begin withdrawing amounts from the account by the first of April of the year they will reach age 70 and a half. If those withdrawals do not occur (either due to neglect, death or illness), penalty amounts are taken out of the IRA by the state. In fact, in many US states there is an active movement undertaken by financial planners to educate retirees on their responsibility to use their IRA’s before the money is completely gone.

Best Scenario: Make a concise list of all IRA’s, work-related pension accounts, 401K’s, annuities and any other retirement savings accounts you may have started. Be sure to include account numbers, bank names, and the names of employers paying out the pensions.

Stay tuned for part 3, where we will discuss health care documents, marriage, divorce and other partnership certificates that should all be a part of your Death Dossier.