Having just experienced an earthquake, a hurricane, and record flooding, we are reminded of the necessity of disaster planning. You have most likely seen news stories suggesting exit routes, communication plans, and stocking up on necessities. But it is equally important to think about contingency planning – making sure your family is prepared and taken care of in the event of your death or disability. While this is not an easy topic to think about, it is important to have a plan in place. The following are some simple and immediate steps you can take to ensure thhe security of your family in the future.
I. Create a List
The easiest way to begin contingency planning is by creating a list of important information and giving it to your spouse, designated family member, or trusted advisor for safekeeping. Although any such list can be tailored to your own needs and preferences, we would suggest that it contain at least the following information:
- Contact Information for your attorney, accountant, investment advisor, insurance agent, executor, and funeral home.
- Location of Key Items/Documents: Location of your safe deposit box and key, estate planning documents (wills, trusts, powers of attorney, living wills and letter of intentions), business agreements (e.g. partnership or LLC agreements, buy-sell agreements), real estate and loan documents (deeds, mortgages), vehicle titles, burial plot deed/title, and family heirlooms.
- Insurance Information (Life, Health and Long-Term Care): Location of policy or insurance card, name of carrier, policy number, and benefit amount.
- Retirement Asset Information (401(k), 403(b), IRA, Pension): Name of custodian, account number, and beneficiary.
- Investment Assets/Bank Accounts/ Credit Cards: Location of accounts and account numbers
- Trust Interests: Name of trust, interest, and contact information for trustee(s)
- Passwords: Do you store your passwords in your brain or on a post-it note somewhere near your computer? Storage methods range from the lowtech to the high-tech and depend upon the level of security you require. Whichever method you choose, it is important to ensure that someone can access your computer and accounts if you are unable to do so. Include the access information on your list.
II. Answer these Important Questions:
The next step is to answer some basic questions about your estate plan to ensure that it is up-to date and carries out your intent.
- Do you have a current estate plan, including a will, revocable trust (if appropriate), financial power of attorney, healthcare power of attorney, and living will?
- Has there been a change in circumstances since your plan was drafted, such as a marriage or divorce, birth of child, change in your domicile or assets, or change in tax laws?
- Does your plan take care of your family and charities in the way that you intended?
- Do you have the right team in place? Is your named executor, trustee, agent, surrogate, or guardian still living, and, if an individual, does he or she have the skills and time to handle the job? Should you name a corporate fiduciary?
- Do you have the right amount of life insurance? After payment of taxes, debts, and expenses, will your family be able to maintain their current lifestyle in your absence?
- Are your retirement plan and life insurance beneficiary designations up to date and coordinated with your estate plan?
- Is the titling of your real estate and accounts coordinated with your estate plan?
Pennsylvania Trust’s team of professionals has a breadth of experience in estate planning and trust and estate administration. We welcome the opportunity to guide you through the contingency planning process and can help with the creation of your list and answering these important questions. You can find a sample template of a contingency planning list here.
– by Leslie Gillin Bohner, Esq.
Ms. Bohner is Senior Vice President and Chief Fiduciary Officer at Pennsylvania Trust.