Unfortunately, when one of us suffers a stroke, heart attack, or other life-threatening event, we could suddenly and unexpectedly experience debilitating 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 great duty to provide a comprehensive planning notice to our successors, especially our spouses, children and other dependents what we do when we suffer one of these tragic events.
As you will see, writing these planning notes is a tall order, but vital to our successors.
By my count, these “death and disability” planning memos should cover a total of 32 main tasks (in addition to any tasks specific to the writer’s personal situation). In this week’s column, I’ll address the first eight of these tasks. I’ll cover the remaining 24 in two later columns. A useful online article on writing planning notes and a set of handy checklists can be found online at A Letter of Final Order: Everyone Needs One.
Here are the first eight tasks to address in your planning memo.
1. Your wallet and checkbooks. You should tell your successors where you keep your wallet and checkbooks when you are not carrying them.
2. your health; your specialists. You should inform your successors of your current medical condition and the names and contact details of any medical specialists or dentists whose services you seek. Of course, if you die suddenly, this information is of no use to your successors, but if you are disabled, it can be invaluable.
3. banks; Lockers. You should provide your successors with the names of all banks with which you have accounts and you should ensure that at least one of your successors is a co-signer for each of those accounts. In addition, you should give your successors addresses and phone numbers of your banks, and advise them that if you become suddenly disabled or die, they should call your banks to determine the amount of cash in each of your accounts.
Finally, if you have a safe deposit box at a bank or elsewhere, you should make sure that at least one of your successors has a right of access to that safe deposit box.
4. Storage location of your personal papers. You should tell your successors where you keep your important personal papers. This may include, for example, your estate plan and documents pertaining to your mortgage insurance, accident insurance, auto and home insurance, life and disability insurance, any relevant Medicare and Medicaid insurance, and any other relevant forms of insurance.
5. Family income and expenses. You should provide your successors with a written list of all the major categories of your own and your family’s expenses and the average monthly and annual totals of your expenses in each of those 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 be time consuming. For example, even if you and your family are frugal, your spending categories can number in the dozens. But your family income and expenses list will be an indispensable part of your planning memo.
6. Various family expenses. In addition to the expenses listed in the family expenses document referenced above, you should inform your successors of any unlisted but reasonably foreseeable family expenses that they may not be aware of at this time but need to be aware of if you become suddenly disabled or die. These can include, for example, quarterly tax payments, costs to replace or repair household appliances such as water heaters and stoves, and family vehicles; and the cost of repairing your roof or repainting your house if it is likely to need it in the near future.
7. Debt. In the list above or elsewhere, you should disclose all of your personal and your company’s and family’s debts to your successors, including mortgage debt and credit card debt, the amount of such debt and the monthly payments thereon, and applicable interest. Additionally, if you realize as you’re compiling your credit list that you can pay off that debt now or soon without undue financial stress or canceling unnecessary credit cards, you should do so.
8. Your estate planner. If you have an estate plan, your plan memo should include the name of your estate planer, their contact information, and where your successors can find your estate planning documents if they do not already have copies. In addition, based on an interview with your estate planner, you should at least outline in your planning note what your executors will need to do if you become suddenly disabled or die.
In fact, you should give your estate planner a draft of your planning memo and, before you complete it and distribute it to your successors, ask for any comments he or she may have about it.
If you don’t have an estate plan, you should get one as soon as possible. I’m not an estate planner, but I can assure you that estate planning is not expensive and that a good estate plan can save your successors a great deal of money and time, and protect them from a myriad of practical problems if you become suddenly disabled or die.
John Cunningham is an attorney licensed in New Hampshire and Massachusetts to practice law. He is legal counsel for the law firm of 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.
Comments are closed.