Did you ever write and share your “family love letter?” It’s probably safe to say that each of us is aware of tragic situations where a loved one died at too young an age, maybe suddenly and unexpectedly. These experiences are shocking, and it is natural to catch yourself wondering how those closest to the deceased will be cared for or work through the situation. Loved ones often find they are ill-prepared to attend to many aspects of another’s life.
On the topic of estate planning, we are regularly encouraged to plan properly for a sudden incapacitation and/or death. Unfortunately, the focus begins and ends with the execution of proper documents, titling of assets, and naming beneficiaries to various financial accounts. Often overlooked however, is ensuring that appropriate family members and decision makers can access adequate information about their loved one’s assets, liabilities, and intentions. And, even if deliberate thought was given to these matters, is information available and quickly accessible?
For example, how many children know where a parent wants to be buried? It can also be problematic trying to locate and access important digital documents for many of life’s activities. In this day, many of our important aspects of life are often stored and maintained exclusively in digital format on computers and devices. Recently, we learned of two different individuals losing someone close and experiencing great challenge trying to discover the deceased’s mobile devices were password protected and memories contained therein (priceless photos, videos, emails, etc. – not to mention important documents) might be inaccessible forever, unless the password could be successfully guessed. The inability to make basic decisions because of the lack of this important information often adds to challenging life events.
Enter the “family love letter”. Such a document is intended to be a thoughtful disclosure of all information that would be helpful to a trusted family member, particularly when a typical will or other legal documents lack the “digital” fine points of life. We offer several component sections to include in your “family love letter:”
- Advisors & Assets: list your trusted financial professionals and contact information, including investment advisors, estate planning attorneys, and accountant. List primary physicians, bankers, and key institutions to help. Asset inventory of where accounts are held – include in this sections any notes that help decision makers understand what objectives were being pursued and why certain accounts are in place.
- Financial Information: inventory of business interests, outstanding liabilities, credit cards, personal guarantees, leases, and recurring subscriptions. Provide an overview of core monthly income and expenses (budget) can also be extremely valuable in the event that the incapacitated individual handled much or all of the financial affairs of the family. Frequent flier miles are regularly overlooked, but may be transferrable; also debts/money owed to you by others should be included.
- Insurance & Benefits: life insurance, long-term care, and health insurance policies should note the related contact persons for each. Beneficiary designations should also be reviewed and kept current per your latest estate documents/plan.
- Documents and Other information: aside from the standard inventory of estate planning documents (wills, trusts if applicable, legal business and medical powers of attorney, marriage license, passports, birth certificates, etc), this is where you can share the specific location of all such items and how to access. Do you maintain a safety deposit box? What bank, box number, and where the key can be found? Do you have a personal safe – how is it accessible? Also document important passwords such as your primary computer, mobile devices, and email passwords (often password recovery utilizes email).
- Final wishes: document areas and desires of your life that would not be crystal clear from any of the above. What is most important to you; what is your family mission statement; and how would you want to be remembered? Experienced estate/probate attorneys share that your wishes, spelled out in writing, are critical for settling family disputes and inheritance issues.
Thus, it probably goes without saying that any document like this is meant to be shared with a trust loved one upon completion, and not just locked away. Be very careful, sharing this information only with those you unequivocally trust (spouse, designated administrator of estate, etc). Sharing a copy with more than one person may protect against unauthorized alteration.
As this brief topic discussion hopefully illustrates, estate planning is not just for the wealthy or avoidance of probate and/or a death tax. Rather, an important goal of planning should be to provide a legacy for loved ones; sharing about passions you care most about. If you have questions in this area, or would like to receive a more comprehensive template from which to build your “love letter”, please contact us. While few among us enjoy discussing these topics, some thought and planning will enhance what we believe is every person’s utmost goal… achieving “financial peace of mind.”