We know how important it is to have an estate plan, including a will, but it’s also a good idea to have a thorough letter of guidance to your executor(s) regarding how they should go about finding your assets and dealing with them.
- Where do you do your day-to-day banking?
- What property do you hold?
- What other type of assets do you have and where are they held?
- Who are the beneficiaries of your life insurance policies? RRSPs? TFSAs?
- What are the addresses of your beneficiaries?
These are all questions that your executor will need to know the answers to but may not know where to look when the time comes – and you won’t be around to ask.
Related: So you’ve been asked to be an executor
Knowing the answers to these questions can make the task of being an executor a lot less daunting.
The more you can do to prepare your executor ahead of time, the better.
How to prepare your executor
Privacy is an issue for some clients. They don’t want to let their executor know those personal details too far ahead of time. But when is “the time?”
When is it appropriate to give your executor all those vital details to assist them in a job that they have likely never done before? The executor is often a family member or good friend who feels obligated to take on this role when asked but has little or no experience whatsoever.
Here are five easy ways to prepare your executor for the role:
1. Letter of direction
A simple letter of direction or wishes attached to the will can greatly assist your executor to fulfill his or her role in the best and most efficient way. The more your executor knows about your estate, the more he/she/they can gather the information without a great deal of trouble or expense.
Related: Creating your estate plan
No private, personal information needs to be revealed. You don’t need account numbers or bank balances, but you do need to advise where these are held.
2. Organize your documents
Put important documents where your executor can find them. A typical executor spends a lot of time searching. Even if you think you’re organized consider putting together a binder or file cabinet drawer that contains the items your executor is likely to need.
Make sure your beneficiary designations are updated for retirement accounts, insurance, pension benefits, etc.
Where is your safe deposit box held? Give a brief description of what it contains and where the keys are kept.
Don’t forget about keys and codes to home alarm systems, mailboxes and gates, locked boxes, drawers and cabinets.
Decide on who gets items with sentimental value that may not be specifically included in the will. Write out a list. Family fights erupt over the smallest things.
Who are the main contacts – financial advisor, the lawyer who drafted the Will, tax preparer, etc? Executors spend a lot of time on the phone. If he or she knows whom to call at the bank or insurance company it will be a huge help.
Related: We who are about to die, etc.
Keep your estate plan files up to date. Review them at least once a year.
3. Make sure some cash is available
After death there are bills to pay and final expenses and fees to cover. Make sure the estate contains a cash account that will be easily accessible.
4. Leave your funeral plans or wishes
If you express your preferences in writing it will make things much easier and head off any family disputes.
Before my father-in-law died he told me he wanted to be cremated. When the arrangements were all but complete, his daughter insisted that he had wanted a full burial. This disagreement caused bad feelings that lasted for several years.
If you want to be an organ donor, put this in writing too.
5. Include your digital estate
You may no longer be physically here, but your digital self lives on.
Related: How to secure your social media and online presence
Think about your social media sites, online accounts and download destinations such as Amazon and Netflix. Make a list including how to access them, and find a safe place to store it.
There are special online sites such as My Web Will and Online Safe that allow a trusted person to change on-line accounts after death.
Final thoughts to prepare your executor
You are handing your executor a lot of work. Wrapping up an estate is a time-consuming process that requires a lot of attention to detail. The best present you can give your executor is a set of documents that reflects your wishes.
Plan in advance by keeping your records organized and making sure the appropriate people know how to find and access them.
Remember – the key is to make life easy for your survivors.
You family will thank you for it.
