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Estate planning: Putting affairs in order before death

A well-planned estate is a wonderful legacy you

A well-planned estate is a wonderful legacy you can leave your heirs — instead of untangling a messy estate, they can follow concrete steps, allowing them to take care of business while mourning their loved one. Photo Credit: iStock

Last week was National Estate Planning Week — a reminder for me to nudge you to "do estate planning." I received great feedback when I published estate planning advice last year, soon after my father died.

A year later, I have fine-tuned a few things, but must say emphatically that while you should consult with and hire a qualified estate attorney to help you through the process, estate settlement requires a lot of work from the executor, so be prepared!

Before a death, here are the basic documents you will need:

 

LEGAL DOCUMENTS

Will

Letter of instruction

Power of attorney

Health care proxy

Trusts — not necessary, but many people have either revocable (changeable) or irrevocable (not changeable), depending on family and tax situations

DNR or "do not resuscitate" order: This may need to be completed upon each new admission to a hospital or nursing home.

 

ACCOUNTS

List of all bank accounts

List of all user names and passwords

List of automatic pay accounts with name and contact information of each payee

List of safe-deposit boxes

401(k) accounts

IRAs, Roth IRAs

Pension documents

Annuity contracts

Brokerage account information: name, contact phone number and email address

Detailed list of savings bonds, and copies of actual bonds

Life insurance policies (private and through employer)

Long-term-care insurance policies

 

ASSORTED DOCUMENTS

Housing, land and cemetery deeds

Mortgage accounts

Proof of loans made

Vehicle title

Partnership and corporate operating agreements

Previous three years' tax returns

Marriage license

Divorce papers

Military discharge information

List of contact information: contacts on accounts, names, current addresses and Social Security numbers of all people named in your legal documents, as well as the contact information for the estate attorney and CPA who will be handling the estate

***

After completing all of this hard work, you need to inform your executor as to where everything is stored. My father actually made sure that I had an executed copy of all the documents, which was helpful.

After death, things get complicated, because you have to shift between grieving and doing. I learned not to go too fast with my mother, so she did not feel overwhelmed. It's helpful to remember that everyone in the family grieves in different ways, which is why patience and compassion often are your most valuable commodities during the process.

Get organized

I found solace in a spreadsheet, which helped me keep track of the estate settlement progression, but you can use any system that works for you. Just remember that there are usually many moving parts, and you may not be at the top of your game for remembering everything that needs to get done. A visit to your favorite stationery store will help you keep records of everything stored neatly in one location.

Request plenty of death certificates

Some institutions want originals, not copies, and it's easier to make the request from the funeral home, not after the fact from the city or state.

Keep track of all bills attributable to the estate

These include funeral and memorial arrangements, death notices and other ancillary expenses. The estate can reimburse individuals for these costs.

Contact the estate attorney

When you are ready, schedule time to meet with the estate attorney. He or she will likely tell you to gather documents and to ascertain a date of death valuation for all accounts to which the deceased held title. If there is a surviving spouse, you should itemize what is in both the living and deceased spouse's names.

Contact the CPA

Even if there are no estate taxes due, in most cases it will be necessary to file an estate tax return. If you prepare your own taxes, it may make sense to hire a pro to help you through the process.

A well-planned estate is a wonderful legacy you can leave your heirs — instead of untangling a messy estate, they can follow concrete steps, allowing them to take care of business while mourning their loved one.

Jill Schlesinger, a certified financial planner, is a CBS News business analyst. She welcomes emailed comments and questions.

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