Imagine receiving a call that your parent has been raced to the hospital. In addition to the fear regarding their condition, you know that you are designated as your parent’s Agent under their power of attorney. For the foreseeable future, you may be in charge of making sure bills get paid, taxes get filed, and all of the countless other tasks that made up your parent’s everyday finances.
Now, imagine you are in the hospital, and you are relying on someone else to maintain your “financial status quo.” You have all the institutional knowledge about your own financial affairs. How could you share this with someone else, particularly when you may be incapacitated?
Clients regularly ask us how to best ensure that the person named in their estate planning documents has access to the important financial information they need to do their job.
The answer is what we call a “financial cheat sheet.”
When Should I Create My Financial Cheat Sheet?
Any time is the right time to create the “financial cheat sheet.” Set aside a few hours, pull out your most recent tax returns, and get to work.
When Should I Update My Financial Cheat Sheet and How Often?
This should be an annual project. January and February are the best times to update your financial cheat sheet. Why? It’s 1099 season. IRS Form 1099s are issued from various banks, investment clearinghouses, retirement account custodians, and others. It is a good time to remind you of any new assets or accounts or any assets or accounts that have changed in the past year.
The good news is that once the initial cheat sheet is created, future updates shouldn’t require all that much time.
What Should I Include on My Financial Cheat Sheet?
At a minimum, we recommend including the following information:
- Computer Login and Password.
- E-Mail Login and Password. Many folks have statements delivered electronically.
- iPhone or Android Passcode. In an age of multi-factor authentication, even if someone tries to legitimately access your e-mail or account from an unknown device, your phone will likely be texted a code to authorize access.
- For each account, whether retirement account, bank account, or investment account, list the account number, online account username and password, and designated beneficiary. It is helpful to organize your accounts appearing on the cheat sheet by account type.
- For regular liabilities on autopay, such as mortgage payments or student loans, list the account that will be accessed to make the payment, the amount of the payment, and the date payment is made.
- For auto, life, and disability insurance policies, list the name of the policy owner, the name of the insured, the policy benefits (and any waiting period), the policy number, and the premium amount and due date. It is a good idea to keep summary pages of these policies with the cheat sheet.
- Contact information for trusted professionals, such as your primary care physician, estate planning attorney, accountant, tax preparer, and investment advisor/financial planner.
- The date the financial cheat sheet was most recently updated.
How Should I Distribute My Financial Cheat Sheet?
We don’t recommend distributing your financial cheat sheet to anyone. Rather, storing the cheat sheet with your estate planning documents is best. You can inform your fiduciaries (the Agent under your power of attorney, or Personal Representative under your will, or Trustee under your trust) where the documents are stored and that there is a cheat sheet of information stored with the documents. You should NOT store your original documents and this cheat sheet in a safe deposit box because this may not be located until long after the information was sought.
Will My Financial Cheat Sheet Be Perfect?
No. Accept that simple fact. But the more current information you provide, the more seamless a process it will be for the person you trust to step in and manage your financial affairs.
Bulman Dunie’s estate planning department is here to help give you peace of mind that your loved ones will be protected in the event of your death or incapacity. Contact attorney Jeremy Rachlin at jrachlin@bulmandunie.com or (301) 656-1177 x305 if we can help you and your family.
