The One Missed Step That Will Undo All Your Retirement Plans

Creating a will and an estate plan are critical steps to planning for retirement, but missing one important step could undo all the work you’ve done: making sure your survivors know where the documents are.

The Wall Street Journal wrote about this issue with columnist Glenn Ruffenach writing about a close relative who asked him to keep a number of boxes filled with what appeared to be household items. “When the relative died suddenly, and no one knew where her will was—or even if she had one,” Ruffenach wrote. “My wife and I ended up digging through the boxes, where, much to everyone’s surprise, we found the will.”

It’s a common story that is being made worse by the electronic age we live in. Paperwork can be difficult to find, but navigating a hard drive through passwords and sometimes accounts held through electronic portals has made it even more of a probem.

Ask yourself, Ruffenach writes: Where is your current estate plan and associated documents? In a drawer? A closet? The basement? A safe-deposit box? Your lawyer’s office? Does your spouse or partner know where the paperwork is, and does she/he have access to it? (If the documents are in a safe-deposit box, does your spouse know where the box and key are?)

Just as bad: Your survivors know where the documents are and can access them, but the paperwork doesn’t include many or most of the details they need: account numbers, passwords, names and contact information for advisers and financial institutions.

Ruffenach spoke with a retired financial executive who was moving to Florida from out of state. As part of the move, he and his wife got new wills, as well as new living wills, health-care proxies and powers of attorney. At the same time, he took an extra, and critical, step:

“I put together a two-page letter and a two-page list as a guide for my wife and our two grown children,” he told Ruffenach. “And we sat down together to review and discuss them.” The letter outlined how the estate plan worked and where the documents were located; the list contained a wealth of additional information: names and contact information for, among others, the couple’s lawyers, banker, financial adviser, insurance brokers and accountant, as well as account numbers and the location of their safe-deposit box.

The simple approach of creating a similar letter and guide for a spouse or partner can be used to regularly remind—and physically show—heirs about where the paperwork sits.

“So…I hope you take time, first, to put your estate plan where people can find it and, second, to assemble all the details needed to put the plan into effect,” Ruffenach writes. “Your survivors will be more grateful than you know.”

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