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Important Papers: Your estate plan is more than just your Will

August 31, 2021

By Raymond M. Roberts, Esquire

When we talk about estate plans, everyone immediately thinks of the Last Will and Testament, Power of Attorney and Living Will/Advance Directive.  But a good estate plan includes much more.  There are a number of documents which will be needed by your executor (or your family) after your passing.  What other documents should you prepare to make your loved ones’ job easier – or what should you be looking for if you are the survivor? There are a number of documents that survivors will need to find in order to properly handle an estate. One of the most important planning tasks that you can do is complete a list of all of your important papers and where they are located.

While the most important papers are obviously your estate planning documents: your Will, Powers of Attorney, and Living Will or Advanced Directive; other documents include:

• Life Insurance Policies
• Annuity Documents
• Stocks and Bonds
• Mortgage Documents
• Bank Statements/Bank Savings Passbooks/Mutual Fund Records
• Brokerage Account Records
• Individual Retirement Account (IRA) Records
• Pension Records/401(k) Records
• Social Security Records
• Military Records
• Contracts
• Vehicle Titles

One of the hardest times for survivors is just after their loved one dies, and that is also the time when they must identify where the bank accounts are, what stocks you own, what bills you owe and what they have to deal with now that you are gone. The greatest gift that you can give them is to make this difficult job a little easier.

So what can you do to accomplish this? You should create an inventory of all these documents and identify where they are kept so that your survivors can find them. The inventory is intended to provide a list of everything your survivors will need with directions of how to find it. A copy of the inventory should be kept with your Will and other estate planning documents. You should also provide a copy to your attorney and your executor.  Request a free copy of our Personal Information Workbook:  An Organizational Guide. This handy guide is set up so you can fill in your information and share it with your heirs.

Identify all of your regular monthly expenses: credit card bills, utility bills, rent or mortgage payments, doctor’s bills and any other regular expenses that you pay out each month. Even though you are no longer here, your bills will continue to accrue. Your survivors must identify these bills and make sure they are paid. You should also identify your sources of income. List your employer and payroll information, any pension payments, 401(k) or IRA accounts and distributions, annuity payments, social security, military benefits or other income that you receive. Your survivors will need to contact each of the payors to ensure that all moneys owed to you are paid to your estate.  Some payments, like Social Security and pensions, stop at death.  Any payments received after death may have to be refunded to the payor, so it is important to notify the Social Security Administration or the pension administrator as quickly as possible following a death.

You should prepare a list of all of your insurance policies and organize a file with copies of the policies and the contact information for your insurance agent. In some cases, you may have life insurance benefits included in your retirement benefits. If so, contact your former employer to obtain copies of the policy and information regarding making claims.

This is important: list all of your bank accounts, with account numbers and addresses of the bank and branch in which the accounts were opened. List all stocks that you own and the location of the certificates (or if you have a brokerage account, the name, address, and phone number of your broker). Do you own mutual funds? Do you have an Individual Retirement Account or a 401(k) through your employer?  Maintaining a list of these accounts, together with log-in and password information for online accounts, will make your executor’s job much easier.  You should also complete a list of your other assets. Do you own cars? What about real estate? A vacation home or timeshare?  All of these assets must be identified and without a road map, the task can be difficult and some of your assets may be lost forever.

Very often, people will have a safe deposit box in which they keep valuables, and they forget to tell anyone about it.  If the box and the contents are not claimed, the bank will eventually turn the contents over to the state. Unclaimed assets may be taken by the state in a process called “Escheat.” Escheat means the transfer of title to the state, whether or not the property may be reclaimed. The laws of the individual states determine what type of property is escheatable, and the amount of time or “dormancy period” which applied before the property must be reported as unclaimed. Unclaimed property in Pennsylvania is governed by the Pennsylvania’s Disposition of Abandoned and Unclaimed Property Act, 72 P.S. §§ 1301.1-1301.29, also known as Pennsylvania’s Escheat Law. This law governs who will ultimately own and control abandoned or unclaimed funds. The law also requires businesses holding unclaimed property to turn over, or escheat, the unclaimed property to the state, which then holds the property in trust for the rightful owner. When the owner of the property cannot be found, the property will be transferred to the state. The state will make limited, passive attempts to find the owners, typically by placing advertisements in newspapers or making a list of escheated assets available online on the Pennsylvania unclaimed property website. If the owner of the escheated property is not found after a period of time, the state will sell the item and the proceeds of the sale will go into the state’s general fund.

Safe deposit boxes present additional challenges as well.  Many people keep their important papers and legal documents in a safe deposit box. While this is normally not a problem, keep in mind that if you fail to pay for the box when it comes due for renewal, the bank may dispose of your papers when they reclaim the box.  If a box is not paid for, and the owner does not respond to bank inquiries, the box can be reclaimed by the bank.  The papers may be shredded or otherwise disposed of and any items of value (stock certificates, cash, valuables, etc.), may be escheated to the state.  Another issue with safe deposit boxes is that, under Pennsylvania law, when the bank becomes aware of the death of the holder of the box, it will seal the box pending an inspection and inventory by the Department of Revenue.  Your executor can retrieve the original will from the box, but nothing else can be removed.  Very often, people will allow others to place their belongings in the box for safe-keeping.  They may allow a child to keep valuables such as collector coins or precious metals in the box.  Unless there is some way to document that those items do not belong to the decedent, they may be included in the taxable estate when the box is audited and inventoried.

There are several alternatives to the bank safe deposit box. The first is a fireproof safe. It is important that if you keep these records in your home, they be kept in a fireproof box or file cabinet. Another option is to deposit copies of these documents with your attorney or your heirs (or both). You may opt to scan documents and save them electronically to give to your family member or legal or financial advisor. The bottom line is that you need to make sure that your heirs know about these documents and how to find them. If you are ready to prepare your estate plan, contact us online or call (412) 338-1184.