Have you ever thought about how you would like your affairs to be left in the event of your sudden death?
Apologies for such a dramatic lead-in, however when one of my clients passed away suddenly (he was the same age as me), it got me thinking about how I can help others make sure that their financial affairs are better organised in case of such an event.
As expats, it is not uncommon for us to be less than organised when it comes to storing our important documents.
We often have them spread across multiple locations. Some may be in our office. Others may be in storage. Yet more may be with parents or other family members in our home country.
Coupled with that, is the fact that death is simply a difficult subject to discuss with others.
This potentially creates an almighty mess for those that would survive us.
As a responsible parent, spouse, son or daughter, the solution is to create a place where your family can access important documents and information should you pass away.
This place is often known as an “in case of death folder”.
What exactly is an “in case of death” folder?
It is a single file (digital or physical) where you keep all of your important personal and financial information together. It allows easy access to these documents in the event that you’re no longer around to help.
This is particularly important when one member of the household does the bulk of the family’s financial management, such as paying bills, managing accounts and storing documents.
The obvious reason is that a time of loss is stressful enough without having to laboriously piece together the deceased’s financial affairs. During such a time, survivors are potentially in the dark, not knowing how things stand and even whether bills can be paid.
However, the difference between having our files organized or not is about more than just avoiding undue stress; leave behind a mess and it will delay inheritors’ access to funds as they try to obtain probate and potentially cost a small fortune in legal fees.
There is also the risk that assets are never claimed if the beneficiaries are not aware of their existence. For example, according to figures from the UK’s Department for Work and Pensions (DWP), more than £400 million is sitting in unclaimed pension pots alone.
Digital vs. physical
This comes down to personal preference, there is no right or wrong way to create your folder.
It can be done by either creating a secure/encrypted electronic file that survivors can access in the event of death. This file can then be stored on your main computer, in the cloud or on an external hard drive.
Alternatively, you can use a physical folder to keep all of the important information together.
For what it’s worth, I went down the physical route when building mine as it allows me to keep original copies of documents such as birth and marriage certificates in my folder.
What should be in an in case of death folder? (A death folder checklist)
Birth, marriage and divorce
- Personal birth certificate
- Marriage licence
- Divorce papers
- Birth certificate/adoption papers for minor children
Life insurance and retirement
- Life insurance policy documents (including beneficiary nomination forms)
- Details of any employer death in service benefits
- Personal pension documents
- Employer pension details
- Annuity documents
- Details of any entitlement to state pensions
- List of bank accounts with account numbers, login details, passwords etc
- Details of any credit cards
- Details of safe deposit boxes
- Property, land and cemetery deeds
- Timeshare ownership
- Proof of loans made
- Vehicle ownership documents
- Stock certificates, brokerage accounts, investment platform details, online investment account details
- Details of holdings of premium bonds, government bonds, investment bonds
- Partnership and corporate operating/ownership agreements (including offshore companies)
- Mortgage details
- Proof of debts owed
Details of gifts
- Dates and amounts/values (potentially helpful when calculating any inheritance tax liability)
- Make a listing of all your sources of income, especially ones that your family might not know too much about
- Employer details
- A copy of your most recent tax return or accounts (if self-employed or own business)
Monthly expenses (so they can be maintained if necessary or cancelled if not)
- Will/testament + details of the person/firm that helped create it if applicable
- Instruction letter
- Trust documents
- Burial/cremation wishes
- Power of attorney
- List of names and contact numbers for your financial adviser, doctor, lawyer/solicitor, accountant, insurance broker.
Email and social media account details
How often should an “in case of death” folder be reviewed?
Firstly, it would be sensible to note the date that it was last reviewed so that anyone using it has an idea of how up-to-date the details are.
Going forward, reviewing the file on an annual basis should be sufficient.
If you are not comfortable keeping these in your folder, consider using a password management program.
A password manager allows you to save all account usernames and passwords in one place. They are then protected using one master key.
There are a number of them available. I use LastPass – www.lastpass.com.
Be sure to tell someone about it. There is little point in going to the effort of creating such a folder if no one knows of its existence or where to find it.
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▪️Ross has been a financial adviser for the past 26 years.
▪️He specialises in working with British expats over age 50 who are looking to optimise their finances for retirement.
▪️He is qualified as a financial adviser both in the UK, as a Chartered Financial Planner®, and in the EU, as a European Financial Planner®.
▪️Ross has been an expat himself for 22 years and currently lives in Warsaw, Poland with his wife and 2 children.