Bay Area Estate And Tax Planning Law Firm

Emergency financial files in estate planning

On Behalf of | Mar 31, 2023 | Estate Planning |

In California, and everywhere else, financial chaos can occur after the death of a loved one, even when a sound estate plan is in place. This scenario includes not knowing what financial and credit accounts were in the deceased’s name, plus login and password information to access those accounts. Heirs don’t have to scramble if you develop an often-overlooked document: an emergency financial file.

What is an emergency financial file?

An emergency financial file contains the details of all necessary financial information. It’s an essential document allowing heirs access to accounts to pay for funeral expenses. Executors can use the document as a reference as a roundup for distribution assets as outlined in a will. However, an emergency financial file has advantages that go beyond estate planning. By creating one and keeping it in a safe place, such as a safe deposit box or an online folder, you can use the information to easily reconstruct your financial life if a natural disaster destroys your home.

Creating the file

The file should contain a cover letter that states its purpose, your will and estate plan, all financial account information, durable and medical power of attorney, trusts, living will and health care directive, and documents like birth certificates and Social Security cards. It should also list pertinent professionals who can help with estate management and their contact information, account passwords, usernames and PINs.

Updating your estate plan

If you have already drafted an estate plan, you should review those documents every few years to ensure that your documents continue to meet your wishes. You can update your estate as many times as you wish by changing beneficiaries, creating trusts and adding other elements as necessary. Many estate documents can benefit from electronic storage that will make them readily accessible if an emergency occurs.

Along with updating your estate plan, you should periodically review your emergency file to ensure it is also up-to-date. Account numbers and PINs can change, so review the file to check that all such information is current. Outdated information defeats the file’s purpose.