Death is one of those things we don’t want to talk about. We simply prefer not to deal with it. But news flash, we’re all going to die at some point. A little planning ahead can reduce confusion and help loved ones during a very stressful time. Creating a legacy binder (also known as a death binder or in-case-of-emergency binder) in particular is one of the biggest acts of love and kindness you can provide to loved ones in the event of your death.
The last thing your loved ones want to do is clean up a web of loose ends in the event of your death, especially if it is unexpected. Death is a stressful time for anyone who has to deal with it, especially those who bear the burden of managing the affairs of the deceased. A death or legacy binder is a helpful tool that will steer loved ones in the right direction as it relates to managing your affairs.
If I’m dead, why does it matter?
There is enough grieving involved when someone dies. Creating additional stress with a scavenger hunt for your critical information, including accounts and insurances is unnecessary.
In my case, I manage all of our household’s finances. I pay all of the bills. I manage all of the retirement accounts and investments. All of my family’s health benefits, my life insurance and other benefits are through my employer. If I were to die tomorrow without any type of after-death plan, my wife would be lost. Household finances are not in her wheelhouse. I do not want this for her or my children, especially during a time of grieving.
Planning ahead with appropriate documents in a legacy binder provides lots of benefits to you and your loved ones:
- Reduces the stress for loved ones faced with difficult medical decisions or death of a loved one.
- Provides a solid plan for those involved to follow; there are no surprises and your intentions are known by all.
- Allows friends and family to focus on you versus on scrambling to get your things in order.
- Provides the opportunity for you to think through how you want things to run if you’re sick or gone.
- Solidifies your wishes while you’re here so that it prevents family arguments later.
What is a death or legacy binder?
Simply put, a death or legacy binder is literally a binder or document with content that outlines critical information that is helpful or needed in the event of your death. It can be a binder, a PDF, a stapled document or any other format that works best for you. I personally like EmergencyBinders.com to create a robust legacy binder. They’ve already done all of the work on the templates and format. You simply just input your information. Keep the document in a safe place that is known to some of the key, trusted people in your life. Some people keep this in a fire-safe document box, in a safe deposit box or simply as a secure file “in the cloud.”
A legacy binder is not just about death
A legacy binder doesn’t just help in the event of a death. This information is helpful in case of emergencies as well. It is also helpful if for some reason, you become unavailable for an extended period of time. Say, for instance, you go on a work assignment for two months, and your spouse or partner has to take on responsibilities for the finances.With a legacy binder, they have everything they need in the file.
What information is in a death or legacy binder?
Examples of information to include in a death binder include:
- A cover letter outlining the contents of the file and its purpose, including key first steps loved ones should take in the event of your death. For instance, contacting the life insurance company, making funeral arrangements to your wishes, etc.
- Will and estate plans, including a copy of the will.
- Key legal documents, including deeds and titles to vehicles.
- Bank account information, including account numbers and passwords as well as beneficiaries or co-owners on the accounts.
- Investment and retirement account information. Include information on account numbers, passwords as well as information on beneficiaries of the accounts.
- Mortgage information, including account, whether there’s an escrow, when payments are due each month and how to pay.
- Monthly budget information. This is helpful in understanding what income you have/had as well as what bills and expenses you have each month.
- List of online accounts and passwords. If applicable, provide information for log in information for your mobile phone, computer, social media accounts and other pertinent information.
- Income tax returns. Include information on how to access your prior income tax returns. If you do them with an online service, such as TurboTax, include the account information.
- A breakdown on your assets and liabilities, outlining the things you own (including vehicles, boats, RVs, etc.) as well as money you owe to banks or other lenders.
- Information on insurances (Life insurance, health, accidental death, homeowners, auto). Life insurance in particular is very important in the event of your death. Include policy information as well as key contact information to make it easy to access.
- Funeral arrangement information. Make your specific funeral or memorial arrangements known in this document. Capture core information in a will, but specific instructions spelled out in your file will also be helpful. Some people choose to pre-fund their funeral arrangements.
- Utility and other bills. The electric company doesn’t know when there’s a death. To prevent shutoffs due to non-payment, outlining all of your ongoing bills along with when they are due is helpful.
- Legacy letters. Are there thing you want to share with certain individuals? Use legacy letters sealed in individual envelopes in your binder to tell them what you need to.
Get started with a legacy binder today!
Prepare now with this quick checklist
- Make sure your accounts (bank accounts, retirement accounts) reflect the beneficiary information you intend. Bank accounts, retirement accounts, investment accounts and so forth all have the ability for you to elect both primary and secondary beneficiaries. Little known fact, designated beneficiaries on your accounts override anything written in a will. A beneficiary designation on your accounts allows for the seamless transfer of those assets to the beneficiary, avoiding the probate process which can be very time intensive.
- Create an advanced directive. An advanced directive will ensure that your wishes are clear on how you want things handled for end of life. Download and fill out free forms online to ensure your wishes are made clear. This helps remove the burden from any one person in your family when you’ve made your wishes known ahead of time.
- Create a legacy binder. You can do this manually, page-by-page, or there are sites that offer legacy binder templates. I personally like EmergencyBinders.com. They make it easy with fillable templates, including information you wouldn’t have thought to include.
- Let your loved ones know about these documents. It is best to let two people know about the existence of your binder or file, one of them being your spouse or partner if applicable. You should let another trusted person in on this as well in the event your primary person is unavailable when needed.
Start Now!
Although it may seem far off, getting your affairs in order now will help everyone involved. It will also give you some peace of mind, knowing that you are leaving your loved ones in great shape. Whether you use a pre-packaged approach or develop things manually, take the first steps today to ensure it gets done.