Unfortunately, if any of us suffers a stroke, heart attack, or other life-threatening event, we could suddenly and unexpectedly experience crippling disability or death. All of us – but perhaps especially those of us who are older and those of us who own and operate our own businesses – have a major duty to provide for our successors, including in particular our spouses, children and other dependents, a full planning note on how to proceed if we experience one of these tragic events.
As you will see, writing these planning memos is a big job, but it is of crucial importance for our successors.
By my reckoning, these “death and disability” planning memos should handle a total of 32 main tasks (in addition to any tasks specific to the author’s personal situation). In this week’s column, I’ll cover the first eight of these tasks. In two subsequent columns, I will discuss the other 24. A useful online article on how to write planning memos and a set of handy checklists can be found online under the title “A Letter of Final Instruction: Everyone Needs One”.
Here are the first eight tasks you should address in your planning memo.
1. Your wallet and checkbooks. You should let your successors know where you keep your wallet and checkbooks when they are not with you.
2. Your health; your medical specialists. You must inform your successors of your present medical condition and the names and contact details of any medical or dental specialist whose services you use. Obviously, if you die suddenly, this information will not be useful to your successors, but if you become disabled, it can be valuable.
3. Banks; safes. You must inform your successors of the names of all banks where you have accounts, and you must ensure that at least one of your successors is a co-signer on each of these accounts. Additionally, you must provide your successors with the addresses and telephone numbers of your banks, and you must inform them that if you suddenly become disabled or die, they must call your banks to determine the amount of cash in each of your accounts.
Finally, if you have a safe at a bank or elsewhere, you must ensure that at least one of your heirs has access rights to this safe.
4. Location of your personal papers. You must inform your successors of where you keep your important personal papers. This may include, for example, your estate plan and documents relating to your mortgage insurance, accident insurance, auto and home insurance, life and disability insurance, any relevant Medicare and Medicaid insurance and any other form of insurance. relevant.
5. Family income and expenses. You must provide your successors with a written list of all major categories of your personal expenses and those of your family, as well as the average monthly and annual totals of your expenses in each of these categories. Without this list, it will be difficult or impossible for your successors to plan their economic response to your death or disability. Compiling your list can take time. For example, even if you and your family are frugal, your spending categories may number in the dozens. But your list of family income and expenses will be an indispensable part of your planning memo.
6. Miscellaneous family expenses. In addition to the expenses identified in the family expense document above, you must inform your successors of any unlisted but reasonably foreseeable family expenses of which they may not be aware at this time, but which they will need to be aware of if you suddenly become disabled or die. . These can include, for example, quarterly tax payments, expenses needed to replace or repair household equipment such as water heaters and furnaces, and family vehicles; and the cost of repairing your roof or painting your house if these are likely to be needed in the near future.
7. Debts. In the list above or elsewhere, you must identify for your successors all your personal debts and those of your business and your family, including mortgage debts and credit card debts, the amount of these debts and the payments monthly payments thereon, and the interest rates. Also, if when writing your loan list it becomes clear to you that you can pay off any of these debts without undue financial stress now or soon or that you can cancel all unnecessary credit cards, you should do it.
8. Your real estate planner. If you have an estate plan, your planning memo should include your estate planner’s name, contact information, and where your successors can find your estate planning documents if they don’t already have copies. Also, based on a discussion with your estate planner, you should at least briefly outline in your planning note what your executors should do and when they should do it if you suddenly become disabled or die.
In fact, you should provide a draft of your planning note to your estate planner and, before finalizing it and distributing it to your successors, you should ask for their comments, if any.
Finally, if you don’t have an estate plan, you should get one as soon as possible. I am not an estate planner, but I can assure you that estate plans are not expensive and if you suddenly become disabled or die, a good estate plan can save your successors a lot of money and time and protect from countless practical problems.
John Cunningham is an attorney licensed to practice law in New Hampshire and Massachusetts. He is legal counsel for the law firm McLane Middleton, PA. Contact him at 856-7172 or [email protected] His website is llc199a.com. To access all of his Law in the Marketplace columns, visit concordmonitor.com.