If something tragic were to happen to you, would your surviving family members be able to manage the family finances without you? Motley Fool
Devoted husband Bob Hassmiller asked himself this same question because he was concerned that his spouse wouldn’t be able to take care of the household finances if he passed away, according to an article posted by Motley Fool.
So he wrote his spouse a letter, called “A Letter From Your Dead Husband,” that he updated every year. This letter was a document that contains information and instructions to help your loved ones make sense of their financial life after you die. If something happened to him, his wife would have the letter providing detailed instructions about where to find everything she needed.
In Hassmiller’s “Letter From Your Dead Husband”, he included things that were important to him. Additionally, in the letter, he described why this is important and meaningful, both for him and his spouse.
But, before you begin, spend some time thinking about how you’d like to structure your letter. Do you want to create a giant table or spreadsheet in a program like Excel? Or do you prefer typing out instructions in a word processor? Maybe you want to use a hybrid of both approaches.
Before discussing the topics to include in your letter, keep in mind that federal and state laws often differ depending on where you’re located. Please use this as a basic guide — but financial and estate experts recommend you do your own research.
Have an introduction
Although it may seem self-explanatory, your letter should describe why this is important and meaningful, both for you and whomever you leave behind.
This is a good place to list the contact info for those who are part of your “financial team” (attorney, financial planner, executor, etc.).
You should also include the locations of your personal documents (Quicken files, utility bills, tax returns, etc.), as well as the locations of any legal documents and the names of anyone else who has copies. Don’t forget to include access instructions for safes, alarms, and websites.
Break down your accounts
List all the accounts that hold your money, including the account numbers. Leave no account unidentified! Be sure to note what is and isn’t automatically paid. You can also include a section for recurring and automatic payment accounts that your spouse may wish to stop — things such as Netflix, Amazon Prime, home loans, insurance, and others. Some types of accounts to consider include savings, checking, money market, CDs, brokerage accounts, retirement accounts (401(k), IRA, Roth IRA), and FSAs (health and dependent care).
List out your assets
Provide the physical locations of your non-monetary items that have value. Include identifying information such as license plates, VINs, insurance appraisals, etc.. Some assets to consider are real estate, personal property (autos, motorcycles, jewelry, artwork, etc.), stock or bond certificates held outside brokerage accounts, what’s owed you (money, goods, or services), business interests, Social Security income, and pension income.
Explain your liabilities
List all the debt or other liabilities in this section. List everything you owe, with account numbers and information about automatic payments, if applicable. Be sure to identify debts held in your name alone separately from what is held jointly by you and another person (spouse, business partner, etc.).
Liabilities to consider are credit card accounts, home equity loans or lines of credit, student loans, personal loans, mortgages, auto loans, business loans, and money, goods, or services you owe someone.
Run through your insurance
People sometimes forget how many different types of insurance they have. If you have minor children, it is wise to review your insurance needs about every three years. And be sure to list the term/renewal date of any insurance.
Some insurances to consider are life, health, disability, vehicle, home or renters, and property (you know, for Aunt Gertrude’s rubies that nobody wants to wear).
Collect your legal documents
Provide the locations of all your legal or other important documents, as well as who has hard copies. Legal documents should include a will, a living will, instructions for final arrangements, trusts or a living trust, power of attorney, medical power of attorney or an advance directive, financial power of attorney, and account names and locations of any passwords.
You can also use this section to address the general disposition of your assets when you die.
Share your financial roadmap
Use this section to provide a summary of your existing finances. You want to give your spouse a general overview of how your finances are set up, what your short- and long-term goals are, and how those may change once you’re gone. Along with a net-worth summary and a list of all our investments.
List trusted financial advisor and their telephone number, especially if you have allowed your investments to become complicated.
Plan for your spouse’s future, and end with love
Your can dictate the disbursement items or money that you feel strongly about. But many people choose to leave everything in bulk to a spouse, giving them the flexibility to spend as they see fit. So make your general wishes known, and include any special instructions.
End your letters with a statement of love. Your completing this letter speaks of all the wonderful times you’ve planned for your future. The document should require only minimal “tweaking” in the future, though it should be a yearly reminder to you and your spouse that financial planning, too, is a sign of your love.
There’s no “right” way to write your letter, so do what makes sense for your family. Remember, this document is for them — make sure they’re comfortable using it!
References:
- https://www.fool.com/retirement/letter.aspx
- file:///C:/Users/ebrow/Downloads/DeadLetterChecklist.PDF