How to Organize Your Affairs So That Your Family Isn’t Burdened When You Pass

Why Organizing Your Affairs Before You Die Matters

Planning for your own death can be a difficult task, but organizing your affairs before you die is a valuable gift for your loved ones. If you pass away without clear instructions, your family members could face months of confusion, unexpected expenses, legal delays, disagreements and emotional exhaustion as they work to sort out your finances and piece together your final wishes.

By taking proactive steps now — from inventorying your assets and putting key estate planning documents in place to organizing digital assets and documenting funeral arrangements — you can spare your heirs this burden and help ensure your affairs are handled according to your wishes.

Step 1: Take an Inventory of Your Financial Life

The first step in organizing your affairs is to take a complete inventory of your assets and debts. Carefully review your financial life to understand and document exactly what you own and owe, including the following:

• Bank accounts

• Investment accounts

• Retirement accounts, including employer-sponsored plans, IRAs and pensions

• Life insurance policies

• Annuities

• Real estate deeds and property titles

• Vehicles, boats and other titled assets

• Collectibles, jewelry, artwork and other physical assets

• Outstanding debts, including mortgages, loans and credit card balances

• Business ownership interests

As you go, make note of which financial institution holds each account and where related important documents and statements are stored. Keeping these important papers in one secure, accessible place makes it much easier for a trusted family member or executor to settle your financial affairs later. For a broader checklist view, our podcast episode The Ultimate Financial Checklist for Peace of Mind can be a helpful companion.

If you own a business, you may also want to review Seven Documents Every Business Owner Needs to be sure you’ve captured key agreements.

Step 2: Implement Key Estate Planning Documents

Having the right legal documents in place can help streamline the transfer of assets, protect you in case of incapacity, allow your loved ones to avoid the expensive and time-consuming probate process, and help avoid family disputes. Together, these core estate planning documents form the backbone of your estate plan and advance care planning.

For a deeper look at how these tools fit together, see Trust, Will or Both? What’s Right for Your Estate Plan.

Based on your specific needs and wishes, consider establishing the following documents.

Last will and testament

A will allows you to name an executor, designate guardians for minor children and clarify how assets should be passed to heirs. Without a will in place, your assets will be passed according to your state’s intestate succession laws, which may not correspond with your wishes.

Durable financial power of attorney (POA)

A durable financial POA allows you to designate an individual to handle your financial affairs should you become incapacitated and unable to do so on your own. This legal document can help avoid court proceedings to appoint someone to act on your behalf. To understand how this document works in more detail, review Financial Powers of Attorney.

Healthcare power of attorney and advance directive

A healthcare POA allows you to designate an individual to make medical decisions on your behalf should you become incapacitated and unable to do so on your own. Often a healthcare POA is paired with an advance directive, such as a living will, that outlines what types of medical care you do or don’t want in certain situations. Together, these documents provide guidance about your healthcare decisions for your loved ones and medical team.

Revocable living trust and other estate planning documents

A revocable living trust allows you to continue managing and accessing assets throughout your life and provides additional control over how assets are distributed after death. A key benefit of revocable living trusts is that assets are typically able to avoid probate and pass directly to heirs. For more detail, see What Is a Revocable Living Trust? Benefits and Key Differences.

In some cases, your attorney may recommend additional estate planning documents, such as marital trusts, charitable trusts, or other structures to address taxes or complex family needs.

Special needs trust (SNT)

If you hope to provide financial support to a loved one with special needs, an SNT allows you to establish an ongoing source of income without jeopardizing your heir’s eligibility for government benefits, such as Supplemental Security Income and Medicaid. Creative Planning’s special needs planning resources can help you explore this option in more depth.

Step 3: Review Beneficiary Designations on Key Accounts and Policies

Many people don’t realize that beneficiary designations take precedence over wills. This means even if you recently updated your will and your beneficiary designations are decades old, your beneficiary-designated account will be distributed to the named beneficiary.

The challenge is that you typically designate beneficiaries when you first establish a new account, and it can be easy to forget about these designations once the account is up and running. It’s not uncommon for accounts to be distributed to an ex-spouse or estranged family member, even when it’s clear the account owner’s wishes have changed.

Because financial institutions rarely send reminders to review and update beneficiary designations, it’s important to be proactive. Using the financial inventory you created, set an annual reminder to review your beneficiary designations on the following types of accounts. For broader guidance on keeping your plan current, see Don’t Leave Your Family Stranded With an Out-of-Date Estate Plan.

Retirement accounts and employer plans

• 401(k)s, solo 401(k)s, 403(b)s, 457s and other profit-sharing plans
• Traditional IRAs, Roth IRAs, SEP IRAs and SIMPLE IRAs

Confirm that your primary and contingent beneficiaries reflect your current wishes and family situation.

Life insurance policies and annuities

• Term life, whole life, universal life and other life insurance policies
• Fixed annuities, variable annuities and other insurance products

Because these assets are often used to provide for a spouse or child, make sure each life insurance policy and annuity lists the appropriate beneficiary. If you’re unsure how life insurance fits into your broader strategy, you might find Do You Need Life Insurance? and Insurance Planning in Wealth Management helpful.

Other employer-sponsored plans and financial accounts

• Stock options, restricted stock, deferred compensation and defined benefit plans (where applicable)

• Bank and investment accounts (to the extent you’ve added payable-on-death or transfer-on-death designations)

If you’re unsure how your beneficiary designations interact with your overall estate plan, a coordinated review with your wealth manager and estate planning attorney can be especially helpful.

Step 4: Make a Plan for Digital Assets

An often overlooked, yet important, component of estate planning is preparing for the transfer of digital assets. Digital assets include any content owned and stored electronically, including photos and videos, purchased music, cryptocurrencies, credit card rewards, travel miles, email and social media accounts, blogs, web domains, online financial and investment accounts and more.

Without a plan in place, your loved ones may struggle to access your digital assets due to data encryption, passwords and identity theft protection measures. To ease your family’s burden — and protect sensitive information — consider maintaining a detailed inventory of your digital assets that includes information on how to gain access. For broader guidance on safeguarding this information, see 8 Tips for Keeping Your Financial Information Secure.

Our Digital Assets Inventory worksheet can help you get started.

It’s important to note that your digital assets inventory should be stored in a secure location, separate from your other estate planning documents. Use your estate planning documents to designate who should have access to your digital assets, not how to access those assets.

Remember that your will becomes a matter of public record after you die; therefore, any account numbers and passwords included there will be available for anyone to see. Instead of including account information in your will, store your digital assets inventory in a secure location that only your loved ones will be able to access.

Step 5: Document Funeral Arrangements and Final Wishes

Organizing a funeral after losing a loved one can be both emotionally and financially draining. Spare your family significant stress and anxiety by documenting your preferences in writing and, when possible, setting aside funds to help pay for your funeral and burial.

When planning your final arrangements, include the following information:

• Burial or cremation wishes
• Key life details to include in your obituary
• Preferred funeral home, church or cemetery
• Details about any pre-purchased plot or other resting place
• Organ donation instructions
• Details about any funds set aside to help cover expenses or funeral costs

Clear funeral planning instructions give your family confidence that they’re honoring your final wishes and help prevent disagreements during an already difficult time. For additional background on planning for end-of-life costs, you may find resources such as Planning for Final Expenses: How to Budget for End-of-Life Costs from the National Council on Aging helpful as related reading.

Step 6: Communicate With Your Loved Ones

Even the best plans fail if no one knows about them, which is why it’s important to schedule time with your loved ones to discuss your plans. During this meeting, share details about where important documents are located, explain who you’ve chosen as an executor and why, discuss any specific wishes that may surprise your family and offer to answer any questions.

This important conversation can help avoid misunderstandings and disagreements following your death, and it gives your loved ones confidence that they’re honoring your true intentions. It also gives them a chance to ask about your values, healthcare preferences and what matters most to you when it comes to your legacy. For more help structuring this discussion, see How to Discuss Your Estate Plan With Family Members.

Step 7: Seek Professional Support to Coordinate Your Estate Plan

Organizing your financial affairs can sometimes feel like an overwhelming task to undertake, yet it’s an important step that can help shore up your estate plan and relieve your loved ones’ financial and emotional burden following your death. An experienced wealth management team can help you organize your financial life and help ensure a lasting financial legacy for the people and causes that matter most to you.

At Creative Planning, in-house wealth managers, tax professionals and estate planning attorneys work hand in hand to help ensure your financial plan and estate planning documents are optimized to meet your goals and reduce your family’s burden. We take a comprehensive, goals-based approach to helping you focus on your financial priorities and, ultimately, achieve your version of financial success.

To learn more, please schedule a call with a member of our team.