Steps You Can Take Right Now, By Yourself, Without The Help Of A Lawyer, To Help You And Your Family Be More Prepared For The Worst-Case Scenario 

Amid the COVID-19 outbreak,  many people are coping with the reality that illness, incapacity, or death impacts everyone, even when it’s unexpected.  When planning for these situations, you are never “too young”, “how much” or “how little” you own is less important, and the size and shape of your “family” doesn’t have to fit into a particular mold.  The bottom line is that planning for illness, incapacity, or death is important for every adult.  

In my last post, I asked you to Just do Something to help your family be better prepared for the worst. 

To help you get started, I’ve put together a short series of posts with simple steps you can take RIGHT NOW, by yourself, without the help of a lawyer, to help you start to get a little more prepared to face the worst-case scenario of becoming sick, incapacitated or passing away. 

Plus, since we are all spending a little more time inside this spring, I’d bet getting around to doing some of this “adulting” is probably on your “I should get to that someday” list anyway.  Why not take this time to get yourself more organized, for the benefit of your loved ones?

Create Inventories 

One of the first things we guide our clients through (before the Life & Legacy Planning Session) is creating 2 important inventories: An “Asset Inventory” and an “Important People Inventory”.  Even if you are not working with a trusted legal advisor, you can start to create inventories on your own.

Step 1: Creating an Asset Inventory

Open excel, word, or even a notebook and list out all of your assets.  Regardless of “how much” or “how little” you own, if your family can’t find it, it will be lost and useless to the people you love. So list everything. 

Here are some assets you’ll want to consider listing:

    • Bank Accounts (checking, savings, CD’s, money market accounts, accounts for children)
    • Real Estate (your home, timeshares, vacant land, commercial property)
    • Important Valuables (collections, family heirlooms, jewelry, guns, antiques)
    • Motorized Vehicles (cars, boats, motorcycles)
    • Investment Accounts (bonds, stocks) 
    • Life Insurance Policies and Annuities (term, whole-life, employer group policies)
    • Other Insurance (long-term care insurance, disability insurance)
    • Retirement Plans (employer-funded, tax-deferred, IRA, 401k, pension
    • Business Interests
    • Money Owed to You (promissory notes, informal loans)
    • Interest in Inheritance
    • Anticipated lawsuit Judgments
    • Other Assets (529 accounts, Health Savings Accounts, pre-tax daycare or commute expense accounts)

Include details you think would be important for someone to have in order to locate the asset.  For example, the institution name, identification numbers, or beneficiaries. Even if the value of the asset isn’t much, it’s still important to list.

Make sure to secure your completed asset inventory safely, as it will include sensitive information. Let someone you trust (who may need to access it) know where you have secured it.  

Why should you create an Asset Inventory?

There are really important reasons for you to organize information about your assets in this way:

If you become incapacitated, your family will need to get access to your assets to continue to support you and those that are dependent on you. 

If you’ve done planning and have a Durable Power of Attorney in place, then it becomes very easy for someone to “step into your shoes” and deal with these assets on your behalf, especially if everything is organized. 

If you’ve done no planning, then your family will likely have to petition the court to have someone appointed to “step into your shoes” and manage your assets on your behalf, for your benefit or the benefit of your dependants. 

The court process can sometimes be quicker if it’s deemed an “emergency” by the court, but oftentimes it’s not immediate. The process involves the court appointing an outside person to come into your home to meet with your family and interview witnesses, a hearing, a judge determining you are incompetent, and then appointing someone to serve as your guardian and the guardian of your estate. 

The court will want to know what you own to determine how your estate can best be managed. Having an inventory ready can help the court make that assessment more easily. 

If you pass away, your family will need to locate everything you own. 

If you pass away without a Will, and you have assets that are required to go through probate, someone will need to initiate the probate of your estate. During the probate process, the court appoints a qualified person to gather your assets.  One of the first things that person will do is give the court a “preliminary inventory” of everything you own.  

Do you have someone in your life that would know everything you have and how to access it?  Most people don’t. 

Remember, your assets are in your name. So, an institution (such as a bank) won’t  just deal with someone who calls and says “Hi, I’m Jimmy’s brother, and I need access to his account.” The institutions will need “letters” from the court that give the qualified person the legal authority to round-up all your assets. 

To hear more about probate and why you probably want to avoid the process check out my interview on the Raised on Real Estate Podcast

For the people in your life that are financially dependent on you, they need to know how to gain access to your assets immediately, for continued support.  For example, would someone know how to access your life insurance policies?

Even if you have a Will or a Trust, your assets will still need to be located to begin the process of administering your estate, either through probate or trust administration, respectively. 

Maybe most importantly, if your assets cannot be located or accessed, THEY WILL BE LOST TO THE STATE!  Yes, you read that right. Property that is “lost” will be transferred to your State’s Department of Unclaimed Property.  Even if the value of the asset is only $10.00, would you rather someone you love or the STATE have the asset?

An Asset Inventory is an amazing tool that can save your family TONS of time, reduce stress, and ease an already burdensome process, whether you have an estate plan or not. 

I believe an Asset Inventory is a critical part of a comprehensive estate plan. So much so, that we include an Asset Inventory with every estate plan we develop.  

Many “traditional” estate planning firms hand you a letter after your plan is prepared that says, “Don’t forget to do (insert a very long list), or your plan won’t work.” One of the items on that long to-do list is usually creating an inventory of your assets. Clients leave, their life gets busy, and it never gets done. That’s why we build it into our flat fee process– no extra cost. We want you to have a comprehensive plan that is complete and actually works

Even if you never develop an estate plan, creating an Asset Inventory is something you can accomplish by setting out an hour or two to get organized for the benefit of your loved ones. It’s hard to overstate the value this tool will have for your family as they navigate an already difficult time. 

Avoiding this preparation to spare yourself in the short-term, only transfers that burden to the people you love during one of their most trying times. So why not get started right now? Just do something to help your family be better prepared for the worst. 

If you want to work with a trusted legal advisor to get organized and get educated about what will happen for everyone you love and everything you own when something happens to you, learn more about our unique Planning Process and the substantial extras we include with every plan (including an Asset Inventory).  Give us a call or book your Life & Legacy Planning Session to get started working with us. 

Please stay safe, healthy, and spend a little time getting organized! 

Jeneva A. Vazquez, Principal Attorney

La Strada Law