Six Steps to Get Your Loved One’s Financial Records Under Control

Six Steps to Get Your Loved One’s Financial Records Under Control

For many people, organizing their paperwork is way down on their to-do list. It is somewhere after getting their teeth cleaned every six months and having comprehensive annual physicals. Some things get put off. If you serve as the caregiver or money manager for a relative, you might find you spend twice as long looking for a document you need, than it takes to perform the required task itself.

If your loved one’s organizational style consists of dropping off paperwork somewhere in the spare room, instead of creating a financial document file, you might feel overwhelmed. Here are six steps to get your loved one’s financial records under control.

  1. Ask Questions

Before you can organize your loved one’s financial life, you need to know about all bank and investment accounts your relative owns and all debt he has. You need to be able to log on to his computer and the accounts, so you will need user names and passwords. If you will be in charge of paying his bills at some point, you need to know about all the regular payments he makes.

Make a list of all of his property, including land, houses, condominiums, timeshares, cars, trucks, boats and other vehicles or property. Get the details about all bank loans, personal loans and credit cards. Find out the names and contact information of his accountant, broker, life insurance agent and lawyer.

Gather his will, trust, power of attorney and all other estate planning documents and confirm that these are current documents. He would need to contact his estate planning attorney to do this for you. Get a copy of the last three years of his tax returns. Find out about any pre-paid funeral plans or burial plots and get copies of these documents for the file.

  1. Look for Essential Documents

Try to find or get replacement copies of these papers:

  • Bank statements
  • Loan documents
  • Titles, deeds, and registration
  • Insurance policies
  • Military records
  • Marriage license
  • Divorce Decree
  • Death certificate, if his spouse predeceased him
  • Stock certificate and bonds

It will be time-consuming and a lot of work to put these documents together. However, if you wait until he has a medical crisis or dies to gather these papers, you will have to deal with the urgent situation and grief on top of all of these tasks.

  1. Organize the Papers into Binders

Grab a three-hole punch and a bunch of binders and labels. Make a stack for each category of paperwork, then place each group into its own binder. For example, legal documents like a will or trust should be separate from bills, taxes and bank statements. Legal documents should NOT be placed in a safe deposit box as access to it is only given to certain individuals on the account.

  1. Dedicate a Space for Financial Paperwork

If you do not designate a work area for the financial files, your brilliant organizational system will unravel quickly, and all of your time and work will be wasted. Get a large enough fireproof safe to hold the essential binders. Get a box or file cabinet for the rest of the papers. Do not share that space with other things, like memorabilia, crafts or storage of other items.

  1. Simplify Next Year’s Taxes

Every year, get a large manila envelope and stuff everything into it you will need for the next year’s taxes. Label the envelope for that tax year. These items can include receipts for tax-deductible purchases, medical bill payments and annual dividend and interest statements.

  1. Gather Information and Documents About Funeral and Burial Plans

People spend millions of dollars buying pre-paid funeral plans and burial plots that go unused, because the person’s loved one did not know about the purchases or did not have the necessary paperwork to claim the benefit. Make a binder that contains everything you will need at the time your loved one passes, including her last wishes and details about what type of service she would like and whether she prefers cremation or burial.

References:

AARP. “Organize Your Loved One’s Financial Records.” (accessed July 11, 2019) https://www.aarp.org/caregiving/financial-legal/info-2018/organize-financial-records.html