Working mostly with younger clients, I never expected to face the death of a client so soon.
In early September, Rae* showed up to our Zoom meeting late and fatigued, unlike her usual self. “Probably not Covid”, she said. Seeing her state, I suggested rescheduling to next week so she could get some rest and go to the doctor if she doesn’t feel better. She took my first, but not my second, advice.
(*The name has been changed to protect the privacy of people in this story.)
To the following week’s meeting she showed up more ill. I was very concerned and urged her to go to the hospital. She wanted to continue with the meeting and we struggled through it with intermittent stop for her to catch her breath after coughing. “I get very bad allergies here.” She still insisted.
My follow up email to Rae went unanswered for a few weeks. Then I received an email from her daughter, the one who pushed her to do financial planning and for whom a big part of the plan is for. “My mom has passed away after a short illness.”
Rae was working overseas and living on her own at the time. Her daughter didn’t arrive in time to see her one last time. Two weeks before she passed away, we were still strategizing how to fund her retirement life for 30 years. Her daughter never found out how she got sick.
Who knows what you leave behind?
In the year of Covid, we are all reminded that situations like this may happen to us at any time. Globally mobile population like us faces extra challenges as we are more far away from our extended family and may have assets and liabilities around the world.
As people who care about personal finance, we tend to focus more on the strategies on leaving more to loved ones. Perhaps the more important part is how our loved ones would even know what we’ve left behind when the unexpected happens.
In memory of Rae, I’d like to remind all my readers to do the following:
Review your Will, Trust Document, Power of Attorney, Advanced Medical Directives, and beneficiary designations.
Depending on where you have assets, you may need to consider both the US law and the law of the country where your assets domicile in. Sometimes you may need to have two sets of documents, or one set of documents that is acceptable in multiple countries. You should work with an estate attorney to create such legal documents.
Note that if you need to draft US estate documents, estate attorneys in the US are licensed by each state since they all have different laws. You will need to find an attorney licensed in your US domicile state or where you own US real estate or company.
On the other hand, in the US most financial accounts can be titled Transfer-on-Death. It means as long as the custodians have the death certificate of the account owner, they can initiate the transfer the assets to the beneficiaries already listed without following a will. The same applies to life insurance contracts. In this case, the Will is normally used to capture anything leftover, such as personal effects or financial interests you may have forgotten about.
If you have gone through the estate planning process, make sure you have updated your account beneficiaries according to what your attorney recommended.
Leave a copy of your Will and Trust Document with the right person.
You want to make sure you don’t hold the only copy of your estate documents and no one knows where to find them!
Normally the estate attorney’s office will keep a copy on file. However, it also requires your estate administrator to know who your attorney is. It’s also possible the attorney has retired since and didn’t keep all the files.
The best thing to do in my opinion is for anyone directly named on the Will to have a copy, whether it’s your estate administrator, family, or guardian of your children. It can be a digital copy. Ensure everyone knows their roles in advance so there are no surprises.
Designate the right emergency contact and inform this person of the role.
Think: if both you and your spouse passed away at the same time, who would be the first person to get the call? Inform this person in advance.
This person will also need to know who else to contact next. Make sure you draw up the contact info in advance for this person to keep. This is similar to the idea of “emergency phone tree” drill you may do at work. One of the main persons to include should be your estate administrator.
Next, how do you make sure this emergency contact gets the first call? It requires you to leave this person’s contact info on the various emergency contact forms.
Where would you need to leave the emergency contact info in order for your loved ones to get the news quickly? At your medical provider? The embassy? Your landlord? Your employer? Your neighbor? Or even on your phone?
If none of the above, consider keeping at minimum weekly standard contact, if not daily, with someone that will seek you out, and call the emergency contact if you didn’t show.
Leave the estate administrator with your financial advisor’s contact info in addition to the Will.
Your financial advisor may be the only person beyond your spouse that knows all of your latest financial information. This is the most efficient way for estate administrator to create an inventory of your assets and liabilities and figure out the next steps.
Of course, this requires you to have an ongoing relationship with the advisor. Otherwise, the information will likely be outdated. The same applies to the information kept on file at the attorney’s office when the Will was drawn.
If you have gone through the comprehensive planning process around your life goals, your advisor likely knows more than what shows up on the Will and account statements. This can also provide more context to assist with the estate administration process.
In fact, I played this role for Rae’s daughter. While she had the Will and access to Rae’s laptop and some passwords, she didn’t know whether she’s got the full extent of Rae’s assets and liabilities. I was able to pull up her net worth statement from our financial planning software, tell her what I know about each account, and share what may need to be done first according to my understanding of the family’s financial situation and Rae’s wishes.
Keep your info current
What if you don’t have a financial advisor that has all of your most current info at all times?
Other than elderly parents giving their adult children access, I rarely found people willing to divulge their full financial picture to someone they are close to.
Even if you have the relationship with someone to do so, it can be difficult to keep that list current. You likely won’t update that list every time you open a new account or buy a new asset, not to mention providing the updated list to another person.
In recent years, there are a few online services designed to fill that void. They allow you to keep all of your financial info in a Vault. Your designated person can only gain access with a death certificate. At the very least, you can have a physical “Vault” in your home or at a deposit box that your estate administrator can get to. However, if you live in different countries, it makes physical access difficult.
The most important step, however, is to make sure you periodically update the information.
Note that it’s not necessary for you to leave behind username and password for people to access your accounts after your death. They probably do not have the legal basis to access those accounts with your credentials anyway. The important thing is making sure the assets, liabilities, and your wishes are known to someone. The estate administrator then can contact each company involved to make proper arrangements. This applies to your various digital accounts and assets.