Ev­ery year about this time, as a fa­vor to my wife and fam­ily, I imag­ine my­self dead.

The Washington Post Sunday - - BUSINESS - BY JONATHAN KERN

I don’t do this to be ghoul­ish or to make my­self feel ap­pre­ci­ated while I’m still alive. I do it be­cause we have a di­vi­sion of la­bor in our fam­ily. And it’s been my job to han­dle in­vest­ments, file tax re­turns, pay bills and keep the fi­nan­cial records. So once a year, I send a let­ter to my wife (and a copy to my daugh­ter and brother) ex­plain­ing how I do those chores and where vi­tal records can be found— just in case one day I’m sud­denly not around to take care of things my­self.

— Jonathan Kern, Page G5

Of course, a death doesn’t have to be sud­den to cre­ate fi­nan­cial prob­lems, even if you think you’re pre­pared.

Whenmy fa­ther died in July, my brother and I had al­ready taken over nearly all his fi­nances. We knew about his stocks, bonds and bank ac­counts. We paid all his util­i­ties and even wrote checks to the fel­low who mowed his lawn and the cou­ple who cleaned his house. Most im­por­tant, we knew where his will was.

But there was a lotwe­needed to know that is never men­tioned in a will. For ex­am­ple, we had no idea whatlife in­surance poli­cies hehad or who the ben­e­fi­cia­ries were. We didn’t have the deed to his house. And while there was no fed­eral es­tate tax in 2010, the IRS doesn’t let ben­e­fi­cia­ries off the hook en­tirely: We will still need to file a form to show how much my fa­ther’s as­sets in­creased in value since they were acquired.

To un­cover that in­for­ma­tion, we had to sift through six file cab­i­nets crammed with 50 years’ worth ofmy dad’s pa­pers, look­ing for any record of the pur­chase price of his house, the cost of im­prove­ments made over the years and what he paid for stocks in the 1970s.

So if, like me, you tend to be the main ac­coun­tant in your house­hold, take a few min­utes to put in writ­ing any­thing your fam­ily would need to know about money and in­vest­ments if you were not there to tell them.

Start with the easy stuff. Write down where you keep your will or trust and whether the lawyer who drafted it main­tains a copy, along with his or her name and ad­dress. That’s prob­a­bly the first piece of paper ev­ery­one will look for.

List all the bills you pay each month and whether you pay them by check, on­line or have them de­ducted au­to­mat­i­cally from your bank ac­count. If bills are sent only to your e-mail ad­dress, say so; peo­ple will­needto look there un­til they can have the bills e-mailed else­where.

The same goes with your home loan, if you have one. Your fam­ily will need to know how to keep up the pay­ments and whether you have been pay­ing prop­erty tax di­rectly or it is col­lected with your mort­gage pay­ment.

Where do you keep im­por­tant pa­pers, such as the deed to your house and the ti­tle to your car? If you have a safe de­posit box, let peo­ple know where it is lo­cated— and where you keep the key! (It’s a good idea to have your spouse or an­other fam­ily mem­ber be the coowner of the safe de­posit box, so he or she can have im­me­di­ate ac­cess to it.)

If you can point fam­ily mem­bers to other im­por­tant pa­pers — bills show­ing im­prove­ments you’ve made to your prop­erty, for ex­am­ple, or old tax re­turns — you’ll save them a huge amount of time and trou­ble in the fu­ture. Re­mem­ber, the IRS has three years to au­dit a re­turn, and it’s al­ways pos­si­ble you won’t be here to ex­plain that de­duc­tion for home of­fice fur­ni­ture you took two years ago.

Then make a list of all of your fam­ily’s in­vest­ments – bank and bro­ker­age ac­counts, CDs, 401(k)s, IRAs, ev­ery­thing. In­clude where you keep state­ments for each so that fam­ily mem­bers can eas­ily find the ac­count num­bers and bal­ances.

If you have life in­surance, write down the name of the com­pany it is with, where the pol­icy (and pol­icy num­ber) can be found and its value. Af­ter all, your heirs can’t col­lect on a pol­icy if no one knows it ex­ists. If the ben­e­fi­cia­ries aren’t the ob­vi­ous ones — my fa­ther named his grand­son as the ben­e­fi­ciary rather than his own chil­dren — this is a good place to iden­tify them. And pro­vide as much in­for­ma­tion as pos­si­ble about other in­surance you have — auto and home poli­cies, health in­surance, even ser­vice con­tracts for ma­jor ap­pli­ances.

Fi­nally, if you’re the only one who knows the pass­words to your on­line ac­counts — the ones for your banks, or bro­ker­age, or util­i­ties— let peo­ple know where they can find them.

You don’t need to in­clude the ac­tual pass­words on the let­ter; you can just point in the right di­rec­tion. You can even do so cryp­ti­cally to pro­tect against the pass­words fall­ing into the wrong hands — for in­stance, “The pass­words are in the piece of fur­ni­ture that Ja­cob broke his tooth on when he was a baby.” Then fol­low up to en­sure your fam­ily knows whatyou’re talk­ing about. Ifyou’re re­ally concerned about pri­vacy, there are pro­grams avail­able that will en­crypt your pass­words so you can safely store them on your com­puter.

When you’re all done, hand a copy of the let­ter to your spouse and, as a pre­cau­tion, to an­other trust­wor­thy fam­ily mem­ber. Once a year, look it over to see whether any­thing has changed.

With any luck, you’ll need to update it dozens of times.

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