How to Build Your Legacy File

No one likes to think about dying, and talking about it can be even more uncomfortable. But the truth is that one of the most loving things you can do for your family is to create an emergency file where they can find all of your most important paperwork. In case of an unforeseen event, knowing where to find all of your financial documents will relieve at least some of their stress and make it easier to stay organized — and move forward with some decisions, should the worst come to pass.

To give the gift of peace of mind to your loved ones, you need to create a legacy file. Think of this as a filing cabinet drawer where you store all of your most important financial paperwork and end-of-life documents. 

While the concept of the legacy file is simple, there’s a lot that goes into making one. Here’s everything you need to know to build your legacy file today.

Location

Your legacy file doesn’t have to be kept in a filing cabinet — although this is a great idea if you have one. You can also keep it in a desk drawer, or in a box on a bookshelf. If you have a safe in the basement or in the back of a closet, you could use that too. The important thing is that your loved ones know exactly where to find your legacy file — and if it’s in a locked location, that they know where you keep the key.

Contents  

Once you’ve chosen a spot for your legacy file, it’s time to fill it. Use this checklist to make sure you your family has everything they need:

• Your will.
• Your estate plan, including any legal documents regarding trusts.
• A document clearly naming your lawyer, estate executor, and any powers of attorney you have assigned. Include complete contact information for each.
• A list of all your financial accounts. Include checking, savings, college 529 accounts, brokerage accounts, CDs, bonds, and your retirement accounts. A complete list will include the name of the bank, the account number, contact information, and the current balance, dated.    
• Insurance policies, including life, home, auto, and health insurance information. This should include policy numbers and provider contact information. 
• Tax returns and related filing paperwork. You should retain the past seven year’s worth, just in case the IRS would audit you after death. These will also help your loved ones file your final return.  
• A list of your monthly bills, complete with account numbers and contact information. This can include the mortgage or rent, utilities, and credit cards, but the details will vary based on your personal budget. This information will help your loved ones settle accounts.
• Important personal documents, including birth certificates, marriage certificates, social security cards, and property deeds.
• Safe deposit box information, including its location and where to find the key. 
• A list of important online passwords, including subscription accounts and online banking information. Include the URL, username and password for each item on this list.
• Funeral instructions for your next of kin. Knowing your wishes will make planning much easier for the people you leave behind. 

Digital and Physical Backup

Now that your legacy file is complete, it’s time to back it up. First, make a hard copy of all of your legacy file paperwork for a physical backup. Most people prefer to keep the originals under lock and key and the photocopies in a more easily accessible legacy file. 

You can also make a digital backup on your computer. You may already have PDF versions of many of these documents, and you can use a scanner to create good replicas of the rest. From there, you can create a file folder on your computer that holds a digital backup of your legacy file — just be sure that you include instructions in the legacy file for finding this. You might think it’s obvious, but our digital lives often only make sense to us. 

If your computer is password-protected, you’ll also need to include that in your legacy file!

Update Annually

Finally, remember to stay on top of your legacy file. Insurance policies are typically renewed annually, and we often open and close bank accounts without thinking much about it. To keep your legacy file up to date, review it once a year. For many people, it makes sense to tackle a legacy file review when you file your taxes: put your newest tax return in the file, remove the oldest one, and then review all other pieces to make sure they are current — including the balances on your financial accounts.

Get Started Today

If you looked at the checklist above and discovered that you have some gaps in your legacy drawer, now is the perfect time to take care of those important tasks. Make an appointment to draw up that will, or meet with an insurance agent to discuss your life insurance options. 

And if you need assistance developing a comprehensive financial plan, we’re here to help. Contact us today to learn more about growing your wealth — for now and for future generations.