You've written a will, completed a durable power of attorney, and filed a set of medical directives with your physician. As far as you are concerned, your estate is in order. And from a legal point of view, you are right. If you have been well advised, your wishes about your estate will be clearly spelled out.
Following them may be another matter entirely. Tracking down your safe deposit key, insurance policies, and even your estate-planning documents can be a trial if your executors or heirs are not familiar with the way you arrange your records. For this reason, it is always a good idea to add a letter of instruction to your estate documents.
In your letter, you should specify the location of your vital records—tax returns, lists of medical expenses and other deductible items, and bank statements. You should list your social security number, policy numbers for life and long-term care insurance, and account numbers for bank or brokerage accounts (with passwords for online access). You also might include the phone numbers of people you do business with—accountants, attorneys, and financial planners—as well as the location of your address book. This will help your heirs in their efforts to notify family members, friends, and neighbors about your death.
As an addendum to your letter of instruction, you should take the time to list all your assets and liabilities. This will give your heirs a concise overview of your estate—and help them prioritize the financial issues they need to deal with.
You should also make sure that your heirs have enough ready cash to pay funeral costs and two or three months of utilities and other expenses. One way to do this is to set up an investment account with a pay-on-death (POD) designation to your executor.
In addition, you should provide the information your heirs need to disconnect these utilities when the time comes. Here again, a list is useful. This one should include your service providers and the location of recent bills. In many instances, you can also include an heir on your telephone and utility accounts as someone who is authorized to make decisions about it, including discontinuing service.
Your own experience will tell you that the passing of a loved one is a trial in itself—and that dealing with estate matters can add needlessly to the pain. Taking the time to clear the way for heirs is an act of love that they will appreciate and remember.