June 11, 2007

If the unexpected happens to you, will you be prepared? Will your bills get paid? Will your loved ones and your advisors have the information they need to carry on? Are your plans and wishes known?

For most of us, the answer is no—or at least a partial no. It's not that we don't want to be prepared. But it's a complicated process and takes ongoing maintenance. A little advice, and maybe a system for organizing the information, can help. 

Whether you are 21 or 91, there's never a wrong time to organize your personal, financial, and legal records. If you are incapacitated for any reason—or in the event of your death—quick and easy access to this information is crucial for your family and for your legal and financial advisors. If the unexpected does happen, it helps to ensure that your family and important advisors can carry on.

This type of emergency preparation is a topic that gets a lot of attention, especially in today's increasingly complex world. For example, a recent Wall Street Journal article discussed the impact of going paperless (using online banking and brokerage accounts, and scanning technologies, for example) on our emergency preparations. While we don't have as many paper statements and supporting documents for reference as in the past, we now have the ability to scan documents and create electronic backups of our paper and electronic records.

The IRS recently stressed the importance of being prepared for the unexpected, this time in the context of natural disasters. The IRS encourages taxpayers to "protect tax and financial documents that can be hard to replace," according to IRS Acting Commissioner Kevin M. Brown. "A little planning can help safeguard valuable information in case a hurricane or other disaster strikes." Among other suggestions, the IRS recommends scanning important documents and backing them up on a removable media that can be stored in a safe location, preferably in another city. They also recommend compiling a room-by-room list of the contents of your home, including photographs and/or video documentation, and safeguarding important documents such as insurance records and home closing statements. 

So, where do you start? And what should you include?

To assist you in gathering your personal, financial and legal records, we've prepared a Lifetime Planning Checklist. The checklist is a framework for gathering and maintaining essential information over time--a sort of personal inventory. You can enter your information electronically in a Microsoft Word® version of the checklist or on a paper copy. You'll also need to gather supporting hard-copy records. If you like, we'll create a CD with your checklist and scans of all your supporting documents.

In the process of completing the checklist, you may identify elements lacking in your own financial and/or estate plan. However, the checklist is not intended as a substitute for professional advice in financial or estate planning. Get great advice. 

You can request an electronic or paper copy of the checklist from your advisor at Bader Martin.

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