In some cases, one spouse or partner handles most of the financial tasks. If this is true in your case, what can you document ahead of time to make things easier for your surviving spouse/partner to handle the finances should you pass away or become incapacitated.
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Hosted by the Pre/Early Retirement Life Stage chapter. Recorded on April 6, 2022.
Slides from the recorded meeting can be accessed here.
Chat from the recorded meeting can be accessed here.
Bogleheads® Chapter Series – Documenting Financial Information for Surviving Spouse / Executor
Narrator:: Welcome to the Bogleheads Chapter Series. This episode was hosted by the Pre and Early Retirement Life Stage Chapter and recorded on April 6. 2022. The topic was documenting financial information for the surviving spouse or executor. Bogleheads are investors who follow John Bogle's philosophy for attaining financial independence.
DFWBogleheads: This meeting is for informational purposes only and should not be construed as personalized investing, and it's also not legal advice. And we're not telling you oh you should do something this way. We're just presenting you with a pretty long list of things that you should go back and consider. This is going to take--it's a lot of things to consider-- it's going to take you a while to think about how you want to do this. How do you want to document this?
So what this meeting is, it's a lot of times in the Bogleheads where especially there's one partner, spouse, person in particular that handles a lot of the finances. Not all the time, sometimes one person handles investing, one person handles bill paying. Sometimes one person handles everything.
So you want to make sure if you were to unfortunately pass away, you want to make sure that the surviving spouse knows where to find accounts, all your assets. And we're going to go over all this. Passwords, things like that, important documents in your house. So basically what this presentation discussion is, is what you can do ahead of time to make things easier for your surviving spouse. And when I say that, it's also going to apply in situations where you become incapacitated and a power of attorney--it's also useful in that situation--where the power of attorney is going to take over. And to a certain extent, when you're the last spouse to die and your executor has to take over. But it's best, mostly geared towards the surviving spouse or power of attorney.
So we're not going to tell you this is how you should do something. We're going to present some options and you're going to go back, do your own research, think about it, make your own decisions.
And also we want to be a little bit careful especially with things like passwords. If you're not the surviving spouse you want to be real careful about when you're going to use that information to log in. You don't want to go start making transactions. You want to--we're going to say take care and consult an estate attorney before taking any kind of action like that.
And then also, this is by no means a complete list of what needs to be done after death. Although we are going to mention a lot of things, it's mostly, like I said before, to prepare in advance before you die, to make things easier for your spouse. So it's not really a complete list of everything that the spouses should be doing after your death.
Okay. So the first things you can do now to make things easier later. So the main thing, you want to make sure all your estate planning documents are in order. That includes your will, your power of attorney. There's medical and financial power of attorney, medical directives. There's probably seven, eight or ten different documents. And when--if you visit an estate planning attorney--they will have a whole packet of documents for you to fill out.
And you want to make sure all of your accounts are titled the way you want and that will work in conjunction with your will. And if you have a trust set up you may have to retitle things in the name of the trust. And you just want to check all of your accounts, including your 401(k)s, your bank accounts, your insurance, all that kind of thing. And then also check all your beneficiary areas, as well as the contingent beneficiaries. Everywhere you have an account that has a transfer on death, payable on death. Bank accounts, brokerage accounts, insurance policies, you want to check all of those.
The other thing you can do is you can simplify and consolidate accounts when possible. I know I need to do that. Somehow my husband and I both ended up with literally three or four different Roth IRAs here and there. And there's no reason why they can't be consolidated. That'll just eliminate or reduce the number of actual accounts, which will just make things a lot easier.
A large part of this discussion is going to be--we're going to call it a book or a binder and I'm just going to start calling it the book--and it's going to have a lot of documentation that you're going to leave for your surviving spouse. And that's what the rest of the discussion is going to be about.
And then also once you create this book you want to go over it with your spouse. Let them know where the book is, what's in the book, and then should you pass away, they will immediately know, Oh, I need to go to the book and it's going to have a lot of information that's going to be very helpful.
One other thing I've heard people suggest is if you've been managing your own investments and you think your spouse is the type that probably is not going to have any interest in managing, you may want to leave the name of a trusted friend or relative. Or some people actually pre-select a financial advisor, even if you don't already have one now, they're going to say, okay, if you decide you want a financial advisor, I recommend this person. Make a list of two or three that you would recommend, of course that are low fee and fiduciary, whatever you choose.
One thing that I've heard of is that you should establish separate credit cards in each spouse's name alone. It used to be that you could have a joint account. I hear that they're going away from that, and you can have a primary person on the account and an authorized user, but I've heard of situations where when the person dies, those credit cards are just going to get shut down even if you're an authorized user. And you could be left with no credit cards.
So that's definitely something you want to think about. Establishing at least one preferably--Clark Howard always says you should have two or three accounts--which is true. Because my accounts are constantly--oh, there was, we detected some fraud, we're going to shut this down. You don't want to be left without a card. So ideally each spouse should have two. Which is kind of a pain because to keep them active you’ve got to do some charges, and then you’ve got to pay four credit cards. That's what I do, pay four credit card bills every month. But in the end it's going to work out.
I think you want to make sure there's going to be some cash available to pay for immediate expenses, particularly funeral bills. If there's a house, obviously household bills, that kind of thing. And there's several different ways to do that. Obviously if it's a joint account it's not going to be a problem. But if it's not a joint account, you could consider leaving life insurance to somebody, adding somebody as a cosigner, putting somebody right away as a transfer on death, payable on death. And those bypass probate, immediately go to that person. Of course you have to trust that person to be able to use that money to pay your bills.
There's an issue about the safe deposit box. I worked as a probate paralegal for a while and we had cases where the person’s will, either they thought there was a will or there was one in the safe deposit box, but nobody had the key. So you actually have to get a court order to drill open the box, or whatever. Even if you had the key you had to get a court order to open the box, if the person's name, if nobody else's name, was on the box. So you want to consider making sure your spouse is on there. And we actually put my adult daughter on ours. to just make things easier later on.
Of course you always want to declutter your paperwork in your house because if not, somebody's going to have to do that after you're gone. Consider purchasing cemetery plots and headstones. My parents went as far as purchasing their own headstones. They had everything engraved except the date. It's installed, it's ready to go. And they're still doing great, but they want to make things easier so they had that done ahead of time.
If you have an HSA [Health Savings Account] especially with a large balance, you want to consider whether or not you want to leave a balance or you want to start spending that down as you never know what's going to happen but you want to consider what's going to happen with your HSA .
And then you want to review the book that you make. You want to review it annually and update as needed. So does anybody have any comments on what they did to handle what you can be doing now to make things easier later just feel free to raise their hand. Go ahead, LadyGeek.
LadyGeek: Yeah okay a couple of things. First, save your chat on the zoom thing. I will be saving it and posting an anonymized version with nobody's names in it.
One thing, let me back up a little bit and give a bigger picture here. We're talking about power of attorney. Power of attorney only exists while that person is alive. Once that person passes, all power of attorneys cease to have any authority whatsoever. It becomes part of the decedent's estate. So when people are clear about power of attorney, be very sure you understand that fact that POA just stops. You have no authority after the person dies with that document.
A couple minor things. If you want power of attorney for a bank you probably all you need to do is take that person with you into the bank, say I want to give this person power of attorney. They'll find a form and have a small discussion. Five minutes later you have POA on that account. That is a very big thing, it's a very big financial help to have POA when the person starts to get near death and becomes unable to have cognitive understanding of things going on. You can step in as POA with the bank immediately.
In fact, I'm doing that. Well I have POA. In fact POA is good before they pass because they say there's a big area where they're not quite passed away, they're on their way, they have a medical condition, and that you need that power of attorney while they're alive. I'm actually doing that for my Mom right now because she has some issues and I just signed a legal contract on her behalf to have an aide be with her in her assisted living. That needs to be a legal contract and they need access to the bank account to do ACH transfer. So welcome to that, but I did all of that under POA, fully legal.
So also upon death, as soon as you take everything to the funeral director, the funeral director is required to notify Social Security of the death. This is for fraud prevention. So once the funeral director files the form every financial institution is notified. So if they notice that they will lock that account. Usually what you do is you call in and say, hey somebody died. And they want the death certificate, the copy of their death certificate. But in the meantime, they already know so you might as well be forthcoming about it and do whatever you need to do before you get to the funeral director. The funeral director gets it.
Let's see, the other thing I wanted to mention is well, if you're going to use a website, fidsafe.com--I'll put the link in the chat--because people who you designate as trusted people, they have to know where the documents are before the person passes. Fidsafe.com, I know some people do that. I'm delinquent on signing up myself. It's run by Fidelity but you don't have to have a Fidelity account. It is designed for beneficiaries to be active after the person passes. So you put everything you want up on that site. It will be securely stored online with them.
So I think I covered enough. They say, oh consider purchasing cemetery plots and headstones, bear in mind the funeral director, if you pay a price and the price increases, I hear that they can charge for the difference. Okay, I'll stop on that.
DFWBogleheads: Okay Joel, go ahead you’ve got your hand raised.
Joel: Okay lots of great ideas. What I do, one tool that really worked for me is Quicken. Not Quicken, Willmaker. It has a great form for recording all this kind of information, and things that you would not have thought about, like your Amazon library if you're a Kindle reader. So I found that alone worth the price of Willmaker and I use that quite a bit.
The other thing that I do is I do more electronic forms rather than a binder. Because a binder is not as safe or secure. But I do make sure that my wife is able to access the--it's on my computer, it's on thumb drives, you can take an image that's encrypted in AES-1024 and leave it in a dropbox--so my daughter has access to that as well. And that's updated at least once a year. So I find doing it electronically a lot more efficient, especially because my book would be probably 300 pages.
And I had a weird thing happen. I was perusing YouTube and there was a little video on how to break into the safe that we bought. so those of you who have a SentrySafe or buy one from Home Depot or Costco, one of the lower end safes. It's fairly good for fireproof but he was able to break it in one and a half seconds. And it's pretty amazing how easy the safes are to break in. Given that book is your whole finances, I didn't feel comfortable just having it all printed out. so that's my little bit.
DFWBogleheads: Right, yeah. I think it's totally up to everybody how they want to do it. And it's also based on--like I don't think my Mom would be able to figure out how to. Like she'll type an email and call my Dad, you know, would you send the email . But anyway, it's all dependent on how comfortable you feel and like you said, you don't want to put it right out in the open where a robber/burglar would come in--like oh there's their you know. So it's all up to you and how you think.
Miriam, go ahead. What do you have to add?
Miriam: Yes. One thing about the power of attorney that many have found that the banks will not accept, many banks will not accept a regular power of attorney that is drafted by an attorney. And even if it's notarized and signed. And I think that Vanguard does not. They want you to use their own power of attorney forms. And with Vanguard, the form is the full agent authority form, and you can also have a limited agent. But if you have that with Vanguard or similar with Fidelity and the other bank, your other investing companies, then you can just--it's easier to get in at that time--you don't have to deal with them not accepting the power of attorney.
And I know that in Florida now they have a clause that is put into the power of attorney form that says banks, if you don't accept this then we're going to get really mad and you're going to pay the price. But whether this really works or not--and who wants to take the chance--just go to the bank and get your own power of attorney with the bank.
DFWBogleheads: Okay, very good. Thank you, Miriam. Keith, go ahead.
Keith: Yes. Good evening everyone. I just had recently gone through this with my mother, and a lot of great information on here. Maybe just a couple of things that I would want to emphasize, based on our experience, is if you're going to bring somebody in, whether it's a child or a trusted friend, bring them in early. At least so they know where everything is. Whether it's in a safe, whether it's online, whether it's printed out and saved somewhere, so they're aware of where things are.
My parents passed away about four years apart. But mentally their progression or regression happened at different paces. And so one spouse, one half, might think I'll give all the information to the other, to my spouse, and they'll be able to take care of it when they go. And then a few years later it turns out that that other spouse might be progressing with something where their mental sharpness is going away, and starts to forget things. So I would suggest starting earlier rather than later. And based on our experience, my brother and I are both redoing our estate plans. We're putting together the binder with documentation where things are at. Account numbers, passwords, 800 numbers, things like that.
Because when my father did it with us, and then he passed shortly after, then we had about four years where we were in charge of our mother's financial affairs. And if our father had not reviewed those things with us we would not know where things are at. We would not have been able to find, whether it's tax returns, other information that we needed, insurance policies that we needed to include with the claim form.
So I would suggest doing it earlier rather than later. And you can always update it as you go if something changes. But do it while you're younger and sharper if you can so that it's as accurate as possible. And then just go and maybe once a year update it.
And I will also say on the cemetery plots. My parents were both planners. They literally bought their headstones and their plot probably close to 30 years ago. And they pre-paid it. So when I walked in to do this with the cemetery he looked at me and said, “Wow, your parents were really smart. It would probably be three times what they paid if you had to pay today's prices.” And that's a significant sum that we did not have to pay out from the estate. So it is a smart thing to think about that ahead of time. Some people don't like to do that, but if you're thinking about who you're giving the money to, and what you're giving, and how much it's smart to prepay ahead of time so that they don't have to worry about that. And if there's a significant increase in price it's already been locked in. Thank you.
DFWBogleheads: Very good, thank you Keith. Henry, go ahead.
Henry: Yeah. So it's really important for anybody who moves from one state to another that the laws, with all of these estate planning documents, are really state specific. And in terms of how many witnesses you need, how it has to be notarized, if there are certain magic phrases that the state wants to be in there to have it be honored when the time comes. And even if there are ways to do workarounds, you don't want to be having a mess with this in circumstances where the documents are actually being applied.
So it's something, that you may have all your documents, and you're all set and you may figure, well everything's good, whether we're in the state where it was done, or where you're moving to. But this is something you want to check out.
DFWBogleheads: Thank you, Henry. Jim, go ahead.
Jim: Yeah. I just wanted to say something that Keith mentioned. Besides the planning of that cemetery plots, whatever the issues are, I think it relieves the family of anguish of what Mom would have wanted or what Dad would have wanted, or whatever. And it may even save a family fight. So anyway, that's all I'm going to say.
DFWBogleheads: Right. Okay we're going to go to the next slide. So this is all talking about the book, whether it be a paper book or online or it could be both. like what I do is I type it online, I mean on my computer,and then I print it out and put it in the file cabinet, with a little color sticky.
Okay so I'm just going to let you know ahead of time what the different categories are going to be. Location. Sometimes you need the original document or you need to know where it is, as far as a document or key. So we have a list of those. A discussion on password codes, which can go a lot of different ways. What to do first, what your surviving spouse is supposed to do first in the event of death.
Contacts. You want to list all the contact info for professionals. Of course a big category is listing all your investment financial accounts, your insurance information. Another category is paying. You want to make sure the bills get paid. Tax returns and then some kind of household and miscellaneous. So we're going to go ahead and just start on those. So that's basically your table of contents, or suggested table of contents, for books.
Okay so like I said this is not--you don't necessarily put the original documents in the book. You can, or you just say where they are. Like here's where my passport is, here's where my Social Security card is. So of course you want very important, all your estate planning documents--And in Texas we have something called a memorandum of wishes that is referenced by the will. And what that is, it's a list of something that could like all your dishes, your silverware, your sentimental items that might not be of huge value, and that you don't want to put that right in the world because that could change pretty often. You don't want to be changing your will very often. So you want to put, if you have something like that you want to keep that with your original will.
And there's different trains of thought on where you should keep your will. My boss, I said I was a paralegal for an estate planning firm, he said put it in a plastic bag and put it in your freezer because that's the last thing that's going to get burned in a fire or put in a safe. Some people put it in the safe deposit box, but then there's the issue of getting into it once you pass. You might not be able to get into it. So there's different trains of thought on where you should store your original will, but wherever you do, let somebody know. Document in this book where it is.
Of course copies of any trust if you have those. Where your passports are, where your original Social Security cards, their birth certificates, marriage certificates, divorce decrees, your original medicare medical insurance cards. Very important, your safe deposit box keys because, of course, if you lose those they have to drill it out, or so I've heard. It's a big hassle. And now lately, last couple times I went, they have a pin, you have to have a pin number to go with your safe deposit box.
The actual original vehicle titles are helpful to have. They can always get replacements but it's helpful to have the originals. If you have extra car keys. Nowadays the car keys cost literally what, $200 to have a keypad made or whatever. So you want to note the extras of those, house, garage remote, car, garage keys, mailbox keys, and some people have paper savings bonds. If those are no --you may have a safe deposit box or you may just have them stored away--you definitely want to document where those are. So this a list of originals of something, or little keys that need to be kept track of. Does anybody have anything that they can add to that?
PJ, okay go ahead.
PJ: There's an electronic binder of this stuff that you can get from online. I posted it in the chat, where the website is. It's $25 or so. But it goes through a lot of these things and gives you guidance and what not to store and that it lets your successors know what you wanted to do.
DFWBogleheads: Great, thank you for that suggestion. Joel?
Joel: Yeah. Just all the originals that you were talking about are great. My only thought would be make sure you can scan as much of it as you can ahead of time.
DFWBogleheads: Good idea. Yes, and just in case you can't look at the originals, then you just have a copy. It's better than nothing, right. Great, great idea. Miriam?
Miriam: Yes. This is a story from a friend of ours. When his father passed away he and his brother were going through everything and they were going through his file cabinets. His father was a lawyer and had all these file cabinets. And they were going through file cabinets in the house, and they had all the kids going to the file cabinets in the house looking for things and they came across some very beautiful pieces of paper that were actual original stock certificates.
Before the days when you were with Merrill Lynch or a brokerage, and the brokerage company held the stock--that the father had actually original stock certificates and that's all they were--and they were in the file cabinets and they were worth quite a bit of money. And our friend said what if they had just tossed them out and not looked at what they were. Now I'm not saying everybody would have original stock certificates, but your parents may have things you don't know they have.
DFWBogleheads: Very true, very true .Okay we're going to go to the next slide. Okay this is a big area and like I said I don't want to give advice on what you should do because there's different ways to handle things. So I have a disclaimer here. Obviously you want to have your passwords documented like LadyGeek was saying for your power of attorney. If you're incapacitated they do have authority to, I believe, log into your accounts and handle your accounts for you. And in a lot of cases your surviving spouse is also on the account and would have authority to log in. But other than that, if somebody passes away, we want to be really careful about using passwords to log into the account. We want to say check with your estate probate attorney before you do that. So that said, there's many different ways to handle it. One time in my job as a paralegal, we had somebody die. We went into their house, and they just had right on their desks, they had this handwritten list, actually a printed out list of passwords and accounts. But then a lot of things were scratched through and they changed the password a couple of times and scratched through. So some of that worked.
You could keep it in a computer file, you could use a password manager. And I haven't used it myself, but I hear my dad uses one. I hear there's LastPass, Dashlane, 1Password, Bitwarden, and from what I understand, they're very secure. And they're very, very helpful because you just have to remember one password, and then all the rest your passwords are very, very secure.
Like LadyGeek mentioned earlier, there's FidSafe. I haven't used it myself but it's a free service from Fidelity to securely store documents if you want to create this book binder online, and then be able to store it with some trusted people, your children or other people like that. You can also give specific documents to only certain people. And you can also, I don't know how you do this exactly, but you can grant access to somebody after your death.
Now also there's the whole issue of secret questions and answers. That could also be another sticky situation where you really want to be careful who you give that out to, but might be helpful in some cases. And then there's also the issue of--I found a thread on this on the Bogleheads forum--a two-factor authentication where they send some code to your email or your cell phone. So you may want to include your swiping pattern or your code or whatever to get into your cell phone in case that's helpful.
You can also make sure, you're a surviving spouse for say, for example, your Vanguard or your Fidelity account--you can also of course access the joint accounts--but you could also make sure that your spouse has their own login to a lot of the accounts. You can have a whole separate login where they have their own set of passwords, and that way they don't have to use yours. That's just one option.
There's other household passwords. There's wi-fi password, garage code, home security code, home safe combination. And it's up to you how you want to handle that. But these are all just things to think about.
And one thing I do is I have two passwords. I have a base password where I have one that's used for just whatever I don't care about. And then I have one that's for financial. And then what I do is for each account I add a bunch of, some characters at the end like pound 62. So in my document I don't actually have the actual password. I say it's my financial password plus pound 62. And then when I print out the document that's when I write the actual base password. And that's one way to do it.
Another way to do it is to, say you have your very important password manager password, you could give half to one of your relatives and give the other half to the other one. And say in the event of my death you can get together and you'll have a whole password. Or something like that. There's many different ways to handle things. But these are just all things to think about.
Does anybody have any input on how they handle their passwords? Anything like that, I know it's a complicated situation. Nope? Miriam, go ahead.
Miriam: I just wanted to ask if anybody had ever had any problems with this when they were dealing with their relatives passing away. Was there ever any problem with passcodes and passwords and account numbers being falling into the wrong hands and being used.
Joel: Well, I had the other problem. I couldn't get access to my late wife’s email when she passed, and that caused no end of havoc. So definitely important. After that Bogleheads thread I did shift to one password and I’ve been very happy. Seems like a really--so I'm an advocate for a password manager, especially like 1password where you can also store copies of files and scans and stuff. So it becomes a much bigger repository than just passwords. That's sort of where everything is.
Miriam: I was just wondering if we were overdoing the concern.
Joel: I think it's probably not overdoing it, but you might be able to navigate through some of it. But I could not get, for instance, google to get me access to my wife's account, even with a copy of the death certificate.
Jim: The other thing I would add is many password things require two factor and you better know your passcode of your partner's phone or have access to their fingerprint or facial recognition which could be obviously problematic, but you may not be able to get into certain accounts.
DFWBogleheads: Okay that's a good point. Alan, go ahead.
Alan: Yes. I don't know about other email programs, but Gmail allows you to set up a trusted contact that would be notified if you have no activity on your account after a certain period of time and would grant them access to your Gmail account. I presume a Mac iPhone and so forth probably have similar type abilities. As well as other social media, whether you're on Facebook and other social media, to possibly have a designated trusted contact.
DFWBogleheads: It's great to know. Bostonian?
Bostonian: I was wondering if anyone has done a dry run. So you have a, let's say, a solid plan together. And then you say, all right assume that I’m dead, can you try and get into everything. Okay, and can you try and get access to everything, execute the plan like you would if I were not around. Just to see if the whole plan works. Do people do that, or do you do your best and you hope.
DFWBogleheads: Are you saying like test, pretend like you're dead and just test it out to see if people can…
Bostonian: Right, father has to do it, I am not here--now you try it out. Like we have a plan together and if something fails better known now than later.
DFWBogleheads: That's a good point. Yeah that's something I think about.
Jim: Someone told me once, where they force their spouse to do the books or numbers once a year so that they have to exercise their way through the checkbook, the brokerage accounts, whatever.
DFWBogleheads: That's not a bad idea at all. That's a good idea, probably. Yeah, Doug go ahead.
Doug: I was going to--I guess third what the other previous two people said-- is training--and what sounds right, twice a year, does that sound good to go through from start to finish pretending like you're dead. I think that's about right, twice a year.
DFWBogleheads: Twice or maybe once a year might be enough, but yeah twice a year. It's good, depends on how long it takes.
Okay. We're going to go to the next slide. Okay, so this is a list of information that's going to be helpful. Pretty quickly there's some things you can wait on, but there's some things you want to do the first couple weeks. So first of all you want to have a list of people to call and contact. A lot of this book is actually based on what my Dad put together and they have a whole list of people. I think they have their email addresses and their phone numbers. I'm sure they would call everybody personally.
But another way to do it would be to actually type up a list of emails and then mail that list to your spouse or whoever, and then they could use that at the time to either copy and paste individual emails or do a whole blind carbon copy where you just have to send that one. And it depends on if you're good friends with that person. If your spouse or child who's taking over knows that person they may want to write a little personal note. But if they don't, they may not want to have to do this 100 times and send out 100 different emails or phone calls, whatever you want to do.
And as Alan mentioned earlier in the chat ,you could pre-write your obituary. And my Mom did this. And the reason she did this, she's like you're not going to know, my Dad had military service. You're not going to know the dates, and when he went to Korea, and this and that. And what his unit was. I'm not going to know that information. So she put together and she may have made sure all the relatives names were listed correctly, with the spouses, and made sure all the--you know a lot of times you list your educational information, military information, and a lot of times you don't know details of that kind of thing. So you may not want to write out the entire obituary and say how great of a person you were, but you may want to list some details that the people may not know.
So you definitely want to list your wishes as far as burial, cremation, church service, who you want to be your officiant, favorite hymns, that kind of thing. Whether or not you have a prepaid funeral policy, whether or not you already have cemetery plots purchased or you have a preference for this particular cemetery, this particular kind of headstone. All that kind of information is very useful of course.
You may want to collect military benefits as far as--and I’m not real familiar with this but my Dad, he was a Korean war veteran, and he said there's some kind of special medallion you can order, or you get it for free, and you put it right on your headstone. So I knew something about that. And you may be eligible to be buried in, what is it called, VA national cemetery, in Arlington or…
Jim: Yeah. My father-in-law passed away. He was a Korean veteran also and he chose in advance this, the military ceremony. So they had an honor guard. It was really nice, really, really nice. And he was interred although he was cremated. They have both in the ground cremation and above ground, and in these columbariums. It was just a beautiful ceremony. He would have really liked it.
The other thing we did, which I recommend, is we wrote a personal obituary that we had people fill in paragraphs. This was not for the newspaper. This was for internal friends and family that included funny stories and vulgarities and all sorts of things you could never put in the newspaper, you didn't want in the newspaper. So it was actually two versions of the obituary.
DFWBogleheads: Nice, very nice. So one of the things you probably want to do right away is inform and collect on the life insurance because that's usually pretty quick from what I hear. You can get that pretty quickly, assuming of course you're going to document later who all the beneficiaries are, and what the name of the company is, and that kind of thing.
Inform Social Security, of course the funeral director would do that. If there's any pension you want to inform them. And from what I understand Social Security will take back because they always pay on the first of the month, and if you say you died on the second, they'll take it back, from what I understand. So just be prepared for that.
You want to obtain multiple death certificates. From what I understand, 12 or even 20 is not too many because a lot of places are going to want originals.
And you don't have to do this right away usually, but you may want to consider going ahead and contact a probate attorney and start the process. There are certain deadlines, for example, nine months if you want to elect the estate tax portability. From what I understand there's a nine month deadline after the death to do that.
And then also, if you're not the spouse and you don't have access to the house and things like that, you probably want to go ahead and start that process pretty soon. You also want to transfer and collect any accounts that the surviving spouse was named beneficiary of, for example IRAs, 401ks, and I don't know enough to know the details, but I know there's a certain way you have to title the IRA to be able to have the full benefits of extending the RMDs [Required Minimum Distributions] and things like that. And I did put a link in there on how to title the IRA as you transfer it over.
And then also there are certain required minimum distribution deadlines that even after a person dies, from what I understand you have to meet those, or you have to pay a 50% penalty, it's a very large penalty, if you don't take out the RMDs when you're supposed to. I think even after somebody dies.
Of course one big thing is you want to continue to pay monthly bills. And we're going to hold this page on that later, and then these are the kind of things we're now getting to be a little bit later. Where after the accounts have been transferred, you want to check on, you're going to have to name beneficiaries because it's going to be in your name now and you want to double check all your beneficiaries.
You're going to want to notify credit bureaus, and the department of motor vehicles so they know your driver's license, so you don't have identity theft. Even after your death you can have identity theft.
Then the surviving spouse is going to want to check their existing estate plan documents. Sometimes they'll still be okay if you took care the first time to name all the contingent beneficiaries .It still may be perfectly fine as long as you have--usually people put their spouse and they put one of their children as contingent for power of attorney. So that may be perfectly fine. You may not have to redo that. But you just want to check on that.
And if you've left emergency contact information, for example, with doctors. You'd want to get that changed. And then you also want to think about your spouse may want to attend a grief support group. If you happen to know of any, you may want to go ahead and have that contact information handy for them. Does anybody have anything they want to add? LadyGeek?
LadyGeek: Oh. Interesting, brings back a memory of some one interesting experience.
Well first when you say death certificate, the only original death certificate is the one filled out by the medical person at the locale at the time of death. Everything else is a copy of a death certificate. I had a problem where my father passed away before a medical person could--he was at home but the hospice nurse didn't arrive in time. So he passed away and she says,“I can't sign off on the certificate because I wasn't there when he passed.”
I ended up calling Philadelphia 9-1-1 to explain the situation, to have someone, have an EMT guy sign a death certificate. And after he then called the medical examiner too because they didn't know this, police coming to the house, did this guy-- was there a crime involved--so I actually had a copy of the doctor's report a few days ago saying he was in terminal stages.
So to say everything. So when you say you get a copy of a death certificate, they say there's one original filled out by the attending physician or medical person. If they're not present the funeral home will not accept the body. I had to wait two hours and get all this stuff straightened out with the Philly EMTs before they would even come and take the body. So just, if somebody passes make sure they're in a medical facility.
But well the other thing that was interesting, I don't know if anyone else would experience, but only a Boglehead would do this. When my husband passed, well I said I made arrangements for cremation for his funeral. While he was in the nursing home we made arrangements. The guy was an insurance agent. He sold me a funeral insurance policy. Like I said before, they can increase the cost, and you have to pay for it. So he signed.
I said I talked to him. You an agent, oh yeah, you're getting the commission for this? Yeah, like for $30. Okay, so I signed it and I checked my account online. My husband passes. I look at the value of the policy. It increased $60 dollars. The value that--so he's going to get paid $60 more than what he charged me.
So I go in with the policy copy and I needed some death certificates. I horse traded. I showed him the policy. He said “Yeah, you know your policy is like $60 more now. Can I have it in cash?” So I negotiated with the guy to get three copies of the death certificate. The prices are set by the state in Pennsylvania. It's $20 per copy. So I got in exchange for that, I basically negotiated three free death certificates.
Because of the life insurance policies, I just felt I got something out, I just had fun in negotiating. But at your husband's death it was just bugging me because of the insurance.
Jim: How many do you typically need? How many did you end up using and how many do you need?
LadyGeek: My husband is also an army vet during Vietnam and stuff. But we--and there actually is a VA cemetery within commuting distance from our location--but we chose cremation. To say like I could have opted for a free VA funeral from burial but we didn't go that route.
I usually set like 10, and also the VA will supply free copies of the death certificate, by the by, so they said how many they will give, yes they said 20. I said give me 10. So I still have a few extras. So I'd say we had no complications, but I thought 10 was a minimum number, and half the time they just wanted photocopies anyway, like Vanguard or whoever else I was doing it with.
And Social Security, they gave it back to me. Yeah, also file for the Social Security death benefit of $255. It's something. So okay that's what I just saw. I wanted to relay that interesting story. That yes, I'm a Boglehead and I negotiated at my husband's death over an insurance policy.
DFWBogleheads: Okay, PJ, go ahead.
PJ: Yeah, I had a recent experience after my mother passed. The beneficiary IRA was held at Franklin Templeton. And then at the end of 2020 I moved it to where other ones were in Fidelity.
But somehow the RMD was forgotten as part of the going over, and then it wasn't recognized until a week ago when I was doing my taxes, that I didn't have an RMD. So I wound up having to go through three people at Fidelity and they actually have a group that does this, and it all got worked out. And the penalty is 50% of the tax, but there is a--you can request a waiver of the tax and have to provide a letter of a reasonable cause--and mine was that it got transferred and got missed. So this was the first year that Fidelity added and it got-- you know I called them on Thursday night. I talked to the retirement specialist Friday and it was executed on Monday.
And now I just had to draft a letter to include with my income tax submission this year. So even though it was all done right, it got screwed up when you tried to consolidate into everything at Fidelity.
DFWBogleheads: Okay, thank you. Jim, your hand’s up?
Jim: I just wanted to point out on the VA stuff. One more thing is I know somebody who interred cremation remains. I forget what they call, Cremains, I think they call it, five years or ten years after the death of the person. So the other thing that they do is they provide the wife or husband--or partner can also do that, you have to find out from them--but they'll put two names on the headstone. So the person who served, to be on the front, it'll say Korean war and on the back could be the spouse.
DFWBogleheads: Good to know, good to know. LadyGeek?
LadyGeek: Okay. Just from what Jim reminded me of, because my husband was a vet he was entitled to a free urn and a free flag as part of the funeral director. And so he gave that to me. I mean the urn was, he said it was worth $300, okay with a nice wooden urn. I did something else with the ashes, they were scattered elsewhere. But yeah, I sound like I’m making this fun but it was a horrible experience to go through. And when you're upset and angry you tend to just be very vocal and just expressing yourself, so I say yeah it was a really bad time for me. But I guess just by negotiating with the guy I was just kind of letting myself vent.
And also by the way, in hospice you do have bereavement counseling. I did go through that process and that was actually very, very helpful. So if anyone is on hospice please take them up on their offer of bereavement counseling. And that can be done while the person is alive because it's a process that's about to happen. So please take advantage of that. It is free, supplied by the hospice. And for a period of 13 months after the death for close family members.
DFWBogleheads: So okay, very good. Thank you, good to know. Joel?
Joel: So as part of the estate plan, what I do is I keep a spreadsheet that's sort of tied to
my automatic updates that splits out every account by the beneficiaries. So they can easily, whoever manages my estate, my wife or daughter, can easily see at this point in time, you know Joe gets 10%, Frank gets 7%, Esmeralda gets 20%, charities get this. They can see a spreadsheet that's real time, with all of that information. And then I also gave instructions for each of the inheritors on how to assume the account. So I would want my wife to make the IRA her own, whereas my daughter is going to have a 10-year stretch, and here's the suggested way of going out to get it. One tenth in the first year, one ninth in the second year, one-eighth in the third year and so on and so on. And I'm not sure if that's going to be helpful or not, but it made me feel better.
DFWBogleheads: Okay, very good. Thank you. Keith?
Keith: I was just going to add. You know something to document for the person who survives if you pass is reoccurring charges that are either happening on your credit card or maybe being taken out of your checking account. We had several of those when we went through it with my Mom and Dad, and it was hard to get those turned off. They wouldn't accept that we were calling to say they needed to be turned off. They need a death certificate sent to them. Sometimes if it takes a while you can be charged for something that's no longer necessary.
So if you're putting together a list of things for your surviving spouse or whoever beneficiary to take care of, you know that's something that they want to understand, what needs to be turned off immediately after your passing, and how they're able to do that. Because that can be hundreds or thousands of dollars a month. It can be anything from Netflix to an antivirus program and anything in between that that person that passed away was being charged for that's no longer needed. So you want to make sure that you document those things, so they're not sifting through your charge card looking for them. And also that they know how to turn them off.
DFWBogleheads: Okay, great. Doug.
Doug: I don't know if this is the right time to talk about this right now or if it's going to come up later. But what do you do in the case of elderly parents who aren't doing any of this due diligence. I'm not sure they have any planning at all and they may not have that much longer. You're going to be faced with a big mess to clean up. Does anybody else have that problem?
DFWBogleheads: Somebody, I don't know if it could've been you, somebody submitted that as a comment on the RSVP. And I don't have a slide for that. However I did put in quite a few links on different articles, books, podcasts, and that kind of thing. So let's talk about that when we'll talk about that. If anybody has any suggestions, I don't personally, but when that slide comes up with the links we'll talk about that. That's definitely an important thing to talk about.
Doug: Okay, thank you.
DFWBogleheads: Sure. Okay let's go to the next one. Let's see, oops- okay this is a real short one, just a list of contact information for professionals. While on the first side we had contact information for friends and family, that kind of thing, to inform them. But these are people that you may have to work with. Your surviving spouse may have to work with a probate attorney, the one that drafted the wills. And then it may be the same or a different attorney that you recommend. You may have one picked out that you want to probate the estate. And then any kind of other attorneys, like if you have a real estate attorney, a business attorney, anything like that.
If you do use a tax preparer or a CPA you want to obviously have that contact information. Financial advisor, if you have one, or if you don't have one but you may want to have one listed for your surviving spouse if they feel they need one. And any kind of insurance agent. Is there anything I left off this list as far as contact information for professionals? Can anybody think-- Keith.
Keith: I just wanted to add, again based on personal experience, my parents had worked with an estate attorney for many years and also had worked with a CPA for probably 20 to 25 years, he literally became a family friend. And when my mother passed and we had to sort everything out, we leaned on them pretty heavily for a number of things, whether it was documents that the attorney had in his files, or the CPA that was able to help out with things because of the knowledge that they have. So just from my experience that was a huge help and well worth the additional fees that we had to pay for their consulting or whatever you want to call it. I think it would have taken us probably twice as long to get through everything and we might have made some, what could have been costly mistakes without that help.
And that caused me to say that I wanted to have something similar because I'm the one that handles the financing. If something happens to me I want my wife to be able to have somebody to call to say, can you help me, I don't understand this. Between her and whoever is helping her to do this. So I think although I know Bogleheads typically like to do everything themselves, they don't like to pay fees and expenses for other people when they can do it themselves. I will just say from my experience it was very, very helpful and well worth the money to have these folks involved for a lot of complicated questions and help that would have taken us a lot longer.
DFWBogleheads: Okay, great. Thank you, Keith. All right, let's go to the next slide. Okay this is kind of a big topic. Of course you want to list all your investment and financial accounts. Because if you have more than just a couple, your spouse may not know where everything is. Or of course, the power of attorney agent or anything.
And I'm going to say a disclaimer. Take care, do not perform any transactions after death without consulting an estate attorney. Like I said before, someone suggested to me once that you should pick a trusted relative or friend to help your spouse, in addition to any of the professionals that your spouse may need. Sometimes they just want a point of first contact, and this could be a trusted friend. If they're just totally lost, like I don't even know what to do first, or I'm totally overwhelmed. You want to, it's a good idea, to have a trusted relative or friend picked out to help your surviving spouse with that.
With that, one thing that's good is to just have a print out of all your accounts, your net worth, just so that your spouse knows, oh here, just get an overview of all your different accounts. Then of course, you want to list every single account, bank accounts, online banks, safe deposit box--whose name is on the box, which physical bank branch, where the key is--we mentioned this earlier, the pin. And also you may want to list what is in there. Do you have savings bonds, car titles, so that person knows, oh if I want to get the car title it's in the safe deposit box.
Of course you want to list all your investment brokerage accounts and it's not a bad idea to print out, maybe once a year, just the recent statement. We'll have all the list of the assets and the contact information for the institution on there. Of course all your retirement accounts, IRAs, Roth IRAs, 401ks, if you have an HSA, list of savings bonds--some people may have paper savings bonds. I know I have paper bonds, and a Treasury Direct account, which is, of course, very hard to get into. People can't even get into their own accounts, much less somebody else’s, right.
Pension, if you have any college accounts--529s, Coverdells--listing real estate, of course your spouse is going to know, but you may just want to have a copy of the deed and the mortgage for your primary home. A second home, rental homes, land mineral leases, you may want to actually list.
And if you don't have a mortgage, you may want to list--I think I have this on the other list--but you may want to list that because you may assume there's a mortgage on all they're trying to find, but it's paid off. So you may just make a note if it's paid off. If you own a business, I don't know anything about this, but you might have certain business documents that you may want to include information there.
And these are some kind of newer things. Digital wallet services that have a balance. I mean you could have $500 in your PayPal account, Venmo, Cash App, that kind of thing, I know nothing about this, but cryptocurrency. You may have a cryptocurrency wallet somewhere that has a lot of money in it. Like I said, you could maybe print a statement or at least download it to a place on your computer that's referenced statements. Or at least where they are.
So they have a general idea what's in the--and there's a reference to a thread later, or I think maybe it's a wiki page--investment policy statement. Just kind of like a rationale. This is our asset allocation, we've got 60% of stocks and 40% of bonds. And then you may want to explain why. So that if your spouse say, for example, may employ a financial advisor, this would be a good thing to have. We've always done it this way and this has worked for us.
And then maybe you were planning to change your asset allocation as you got older, that kind of thing. Just your rationale for how you've been doing your withdrawals, your withdrawal policy, that kind of thing.
Let's see, and then location on your computer or files that might be helpful. You may have a file, I have a file with all my dividends that are coming in from different places. I have every quarter a list of dividends. And that way your spouse knows, oh I'm going to expect a dividend in a month and that's going to be helpful for me to have that cash flow, that kind of thing.
Just any kind of spreadsheets you have. You may have estimated tax spreadsheets, net worth statements, something. you know just put the location of the file on there that might be helpful to them later on. Joel, do you have input on this slide?
Joel: Yeah. We did a wiki called a retirement policy statement that takes it one level above an investment policy statement, that describes how retirement's supposed to work, and what the goals were, and how the money flows, how you get paid every month. That might be a useful thing.
DFWBogleheads: Perfect. Yeah, that's the kind of thing that the surviving spouse would want to take to the--if they decide to hire a financial advisor that's exactly the kind of information that would be very helpful for that kind of purpose. So anything else?
This is pretty important. As far as you know, it's so easy to miss a little account if you don't document all of them. Your spouse very well may not know, and then you may never get anything in the mail if you're on a paperless system. It may be going to some email somewhere and they may never know. Even if you may have your tax statements going to the paper list, you may never get anything in the mail. So important to document every single account even if it's a small, a couple hundred dollars or whatever. LadyGeek, go ahead.
LadyGeek: Just one thing. Financial mortgage, and also car title, do you have a car title let's say, or car loan.
DFWBogleheads: Right, yeah. I did not mention car loans. That's a good point. You definitely want to list debts as well. As I think I have mortgage--there's a whole section on bills--but I didn't actually put car titles, car loans, but the mortgages, yeah.
LadyGeek: Actually if you lose a car title a notary will get you a replacement, so it's easy to find.
DFWBogleheads: Yeah, okay. Let's go to the next line. Okay you want to document, of course, all your insurance information. List all the types of policies you have whether it be homeowners, umbrella, you may have a boat policy, of course auto. You may have several different life insurance--you may have one from your employer, hopefully you have one--or if you had one at the time when you were younger, you may not need life insurance when you're older, outside of your employer.
So you may have two or more. You may have long-term disability, long-term care, several different types of medical, dental, medicare, medicare supplement, prescription drug, all those kinds of policies. Annuities I guess count as insurance. And of course prepaid funeral arrangements. You just want to list what types of policies you have. What's the insurance company, agent name, contact information if you have that, dollar amount on the policy for life insurance, that type of thing. Of course who the beneficiaries are is important for life insurance. That type of thing. Gouri, go ahead.
Gouri: Thanks I have nothing useful to say. But I wanted to share a humorous quote from Charlie Munger, which is,”All I want to know is where I’m going to die, so I'll never go there.”
DFWBogleheads: That's very funny. Doug, go ahead.
Doug: Well, I think part of the final instructions ought to be to have the surviving person log into your email account at least once a week after you're dead.
DFWBogleheads: Good point.
Doug: Because you're going to have stuff for the next year, probably once a week for the next year because you're going to have stuff coming there regarding insurance and who knows what else, brokerage information.
DFWBogleheads: That’s a very good point, and if you don't log in, eventually after six months they could actually delete the whole account if you don't want it. It is right to log in periodically. It's kind of the same thing like you're getting your mail, but nowadays a lot of times you don't get mail. So you’ve got to check the email because there could be some very important tax forms or all kinds of things coming into the email. LadyGeek.
LadyGeek: Okay, back to bank accounts.If while the person is still alive and you have a joint account and the person passes, do not close that account. It depends on the bank. Each bank follows the Uniform Commercial Code for the state, and it's up to the bank to decide, but you can deposit checks made to your deceased spouse if your name is on that account. It is legal, and the way you endorse the check is” for deposit only”. That is a legal endorsement you never have to sign a check actually, unless you want to cash it. For deposit only is a legal endorsement.
So if they make an account--like once a year I've been getting a couple dollar checks, because my husband's had something that spits out a dividend for a couple dollars. And I can't kill the thing, I can't get rid of it. That's another story. Where I have to file probate. I didn't file probate in this one county in western Pennsylvania, for some royalty thing, and they have to file in that county. It isn’t worth it. So at least below the amount that you have to pay taxes. It's like a couple bucks, but the thing is it comes in his name. I say for deposit only, goes into my joint account and it's his income.
So they say, but it depends on the bank. But that's why I have a local service bank. They do that for you. So that's very important. Otherwise you'd have to set up an estate checking account, which is a whole other thing that I can go through.
On life insurance, a lot of times you don't know if you're the beneficiary. You don't know if this person even had a life insurance policy. How the heck, believe it or not, insurance companies want to find beneficiaries when a person passes. They really do want to try very hard and give you your money.
So I put a link to the wiki's life insurance article in the chat. I did it earlier when I was talking about it. But in there there's a way that there's a search that you can do for free. How to find out if this person has a policy. It is well worth it to go through that process. Additionally, you don't know if that person has any unclaimed property, unclaimed freight, or whatever.
But one thing that actually, that policies, if the insurance company cannot find the beneficiary that money goes to the state as unclaimed funds. And also other things go into there. Like somebody sent you a check 20 years ago, it was never cashed. That goes to the state's unclaimed property. I've got a couple of bucks that way too, searching for my own name. So search unclaimed property for yourself first, and then for this person who's deceased next. And you might get a hit, and you never know. So I just want to say something about life insurance. Okay, I'm done.
DFWBogleheads: Very good. Thank you, all good suggestions. Okay let's see what the next slide is. Okay this is an important one: bills. Because, of course, especially if you're living in a house, you definitely want your spouse to be able to keep the electricity on, that kind of thing. So you want to let them know. Obviously they don't know where the checkbook is, and if you have a whole box of spare checks, I don't know where those are.
You want to list all the bills, how it's normally paid, whether or not you get something in the mail or you get something from the email. Which is usually the two ways that you pay bills. Or sometimes they're automatically paid but you usually do get an email notification of the amount or whatever.
So the types of bills you want to list. Of course credit cards, utility bills, insurance bills, mortgage--and if you want to state if you don't have a mortgage because somebody might not know, might be looking for your mortgage when you don't have one--property tax, cell phone service, cable streaming services, digital subscriptions, home security, fitness center gym, any other online services.
And there are some that you would want to let your spouse decide. But if you were into genealogy and you're spending all this money on ancestry.com, they probably might want to cancel that right away, but they may not want to cancel the cable service, the streaming, you know, Netflix or whatever. So they can decide, but you should at least list them and then if you've forgotten a few it'll probably show up on the monthly bill and then it'll be like a recurring expense.
One thing I was looking at today, was if your spouse just seems overwhelmed with the thought of having to pay the bills, and figure out what's up there, is something called a daily money manager. And this is a nationally certified professional --I've never used one--but there's a website you can go to to find one in your area .And they are certified to be fiduciaries, and they have to have a certain amount of education and exams. So that is an option. They basically can pay your bills, organize all your finances, get together your tax information, that kind of thing.
If you know for some reason your spouse is just overwhelmed and just can't deal with that kind of a thing. So that's just an option that I wanted to mention. Okay does anybody have any--Doug, go ahead.
Doug: Yeah, if you've been doing all this stuff, let's say for 30 years, and your spouse has not touched any of it, they will get overwhelmed. So I think this is something that you've got to take over if you're especially getting towards late in life. Any time you touch something financial, drag them to the screen and have them sit in a chair with you while you've logged on to your bank account. You know unless you go into the online bill paying area of it and just show them every month what you're doing--I mean now would be the time to include them if it's been 30 years and they don't care less about anything financial--you know if you're getting late in life, now will be the time to get them involved instead of just waiting until, here's a set of instructions after you're dead. Because they're going to get totally overwhelmed.
DFWBogleheads: That's a very important point. I think you're definitely right and I'm glad you mentioned bill pay because I don't use it myself. But I should have made a point if you log in--I don't even know how you do that--you log into your bank account, and then a lot of times you can pay all your utility bills from there, right. I mean I don't know exactly how that works, but I should have mentioned that.
Doug: I never send any checks or anything in the mail anymore. No, it's all done online.
DFWBogleheads: Very important, Doug. Thank you so much. LadyGeek?
LadyGeek: Oh okay. You mentioned Netflix, let me talk to you about Amazon. When my husband passed, he was actually the primary holder of a ton of Kindle books that we both jointly read. He shared a lot of stuff under the family sharing thing and also some of the services and video stuff. Everything was under his account. I had my account too, we just shared.
So when he passed, I called up--I actually had to call Amazon, believe it or not, it's possible to call Amazon--and explained. I said I have a death certificate, everything. He said, “Lady, just keep the two accounts.” I asked them to combine all the shared stuff. They cannot do it.
Long story short, yeah but no. So he said, ”Look, it's okay you can log into his account with his stuff. You just go ahead and do it. We know it's a household.” Just stop there, no sorry, no. So I now have two, I'd actually have two Amazon accounts. What I did do was change his credit card to mine, just make it the same. And then when I re-up to Amazon Prime I did it under my account. But the idea is Amazon cannot combine things that are shared. So just a little FYI. But it was okay to log in with his credentials because it's a family thing.
Joel: I appreciate the tip on Amazon--that so that was news to me. My personal problem was genealogy. I'm glad you mentioned that. My wife was very into genealogy and she didn't leave any instructions on what I should do with all the research that she had done. And it haunts me today that she didn't. I closed the account. I have no idea what happened to any of it. But you know I had no interest and I ended up with piles of Finnish to English dictionaries, and English to Dutch dictionaries and all sorts of weird stuff that genealogists would love but it was just clutter to me. So this was one area where I thought I failed her memory. So if you're into an esoteric hobby like that, definitely arrange for somebody to take it over.
DFWBogleheads: Good point. Yeah, because sometimes there's a cousin or something like that that might be interested. Where usually genealogy, you're either interested or you're not. So that's a good point that you should think all that through ahead of time, and maybe link up your tree with somebody else's so that everything you know, information, your trees, at least out there somewhere, maybe something like that. So that's something to think about.
Alright, let’s see what else we have. Okay taxes. So the important thing is to document how you've been filling it out on TurboTax, some of the other tax services. Do you fill it out by hand? Do you use a tax preparer? Which one? The contact information. And then where the past ten year--I guess you only need three, but maybe ten years--are stored. Sometimes they may be paper files. They may be on your computer in a pdf that you save from TurboTax. That kind of thing. They may be with your tax preparer.
So those could be important if we obviously want to use--notify the tax preparer in the case of death because there may be some deadlines, like RMD's and that kind of thing. There is actually a deadline on preparing a tax return for the decedent. Then there's also a couple other things that you may want to document, that might be important. If there's a basis to your IRA, it's like say somebody's been making a non-deductible IRA contributions for many years and never rolled over to a Roth for whatever reason, or converted to a Roth. That does carry over to the inherited IRAs. So that is important to know. That will save you some money.
If you have a gift tax history. If you've given money to your children above the exemption, the $15,000 or whatever it is per year, you do have to file, you would have supposed to have filed a form 709. And technically those are important because they get subtracted from your lifetime exemption. If you go above the, of course now it’s 11 million--but it could go back down someday--and a lot of Bogleheads could be going above that amount. So if you had filed a tax form, a gift estate gift tax form in the past it would actually be important to have those forms.
If there's any charities, you contribute regularly, especially if there's a case of a small charity that they're highly dependent on you and you would like to continue that as part of your legacy when you die. You know you can't force your spouse or your children or whatever to do that, but you can make a suggestion, I really want to support this. Of course you can put it in your will too. But that's just something to think about, if you want to support any and continue to support charities after your death in ways other than your will.
Also think about your HSA if you have a large balance. If it's your spouse, obviously it just becomes theirs. Let's see there, I did try to look into this topic. I actually spent a couple hours trying to figure this out and there was some information in the Bogleheads wiki that it's not quite clear if the spouse can reimburse themselves out of your HSA for expenses that you paid before your death. It's not quite clear, but it might be possible. So you may want to have that information documented. Most people if they haven't been reimbursed from the HSA, they have a spreadsheet or something somewhere--here's all the expenses that were paid but not reimbursed. So that's just something to think about. Is there anything else? Keith, go ahead.
Keith: Yeah I was just going to mention a couple of things that you would want to document if something were to happen to you. Are you making estimated tax payments quarterly? You want your surviving spouse or executor or whoever to know whether you've done that or not. And also keep in mind that you'll have a tax return that'll be due if you've gotten income through half the year and you pass away in July, so the surviving spouse is going to need money to be able to pay taxes for you, depending on how everything's done.
We just just went through this with our mother with taxes for 2021. So those are things that you want to keep in mind, that need to be documented so that the surviving spouse or whoever is able to take care of that, and knows the up-to-date information.
DFWBogleheads: Very important, Keith. Thank you so much because I completely forgot about mentioning the estimated tax payments. That's very important because how would they know? They'd have to dig through all your bank statements for them. How would they know that? They may not know that you've made a large--you could have made a ten thousand dollar estimated tax payment and they wouldn't know. Thank you for mentioning. That's very important.
Doug, go ahead.
Doug: Yeah. I'm thinking that--like this in regard to estimated tax payments and any other TurboTax tactic, this whole slide here basically, and also investment policies, all of that. If your spouse has just not taken an interest in it, I don't think you can document all this. I think you've got to make a transition plan to a professional, to take your place after you're dead and maybe talk to them about what's going on and give them this information, along have a meeting with this professional, along with your spouse, with the plan that you'll transition to this other person after you're dead, the professional to take your place.
DFWBogleheads: Very good point. Because a lot of us--like I always do the taxes and I've been, for some reason I've always been interested in taxes. So something, an article comes up on taxes, that I'll read it, and so I've been just learning about this for 30 years. So it's hard to forget how overwhelmed somebody that knows nothing about it is going to be when, they may not even know what some of this means. Like what is the basis? Like I don't even know what that means. I don't even know what you know. They may not even know so they may be completely wrong. So I think it's a very good point.
Doug: They're not going to know, and the reason they don't, they haven't been interested in it like you have been, and I have been, kind of, you know, just out of interest. They don't care. They have other things they’re interested in. So you're going to have to get a professional to take their place. That's my opinion.
DFWBogleheads: That's a very good point in that I don't think it's a bad idea to, even if you don't use a tax preparer, maybe just line one up, and maybe just pay for an hour of their time to have a meeting and then just kind of, like you said, smooth the path to them taking over. So that's definitely a good idea. Okay anything else on taxes? Nope.
Okay. This, the last thing in your book, is going to be anything important you want to mention that your spouse may not be aware of about the house itself. The names of who services the heat, what's the schedule you need to have. Like we have every fall, in spring, they come and they service, we have a contract, they service the air conditioner. You want to know who does that. If you have any handymen, lawn service, plumber, that you like to use, a house cleaner. You want to have their contact information, what kind of schedule you're on for lawn care, that kind of thing. You might want to mention special filters that need to be changed, anything else that wouldn't be obvious as far as maintenance on your house.
And then also, as far as contents of the house--now some of these things are not specifically financial, but since we're talking about all this stuff--it kind of goes with this, the location of valuable items: jewelry, coin collection, firearms etc. And this is non-financial, but the location of important family mementos or sentimental items. Family photos and nowadays, of course, they could be physical photos, digital photos on a computer, but they may not even be on your computer, they could be in the cloud. And these could potentially be important photos of your relatives, your kids of course. Your spouse is going to want to know where they are. So you want to document that.
Then we have the whole category of social media. It's called the digital estate plan. A lot of the companies like Facebook will have something called memorialization settings, where you could think about beforehand. Do you want your account just deleted, wiped out? Do you want it memorialized, where it's stated that you passed away, but then leave your page open so people could make comments after your passing. So you just want to think about that, and then see if the other ones that you're on, what kind of settings they have that you could possibly fill some of this up beforehand and get it set up.
Going back to the genealogy, you may want to just figure out what to do with that information. If there's another family member, if not your spouse, or maybe somehow merge your family trees in with somebody, one of your other relatives that you have a place to add on your portion of the family tree.
And then of course the whole category of pet information. If you have any preferences. If your spouse is not there to take your pet, who you know you might want to recommend, almost like a guardian for your pet. If they have any special medical needs. All that kind of information.
PJ, do you want to go ahead and share on this topic?
PJ: Yeah. On the prior page I think we forgot to include is if the estate has not finished with probate you have to do an annual tax return for the estate too. Which you know, it's another thorn in the side. I always say if you don't like somebody, make them the executor of your estate. Then don't have anything prepared and let them figure out life.
DFWBogleheads: So hopefully the estate attorney would be helpful with that. And maybe even have a CPA lined up for that kind of thing, if you don't already have one. That is important. If it's open for more than a year.
PJ: You would have to go through which assets remain in a trust that goes to the successor trust versus the things that have to be into the person that died’s estate. And you don't want to spend $2,000 dollars for an attorney for something that's worth 50 cents, right.
DFWBogleheads: Okay, all right. Thank you, Doug.
Doug: This valuables in slide 11 is important in firearms. When my father passed away he had an army issue 45 and a valuable German handgun called a Walther he got through World War II. When he passed away my brother and my mother decided they didn’t want that around the house so they called up Leisure World Security to get rid of these firearms. So Leisure World Security came over and took them away. I found out later they were worth thousands of dollars. So you can lose thousands of dollars if you're not aware, the person who's living is not aware, that there's some valuables around the house.
DFWBogleheads: And also there might be an issue, I don't know anything about firearms, but there might be an issue where if it's registered to your name and you just give it to somebody else. It's still registered to somebody's name, and then if it's used in a crime. Is there an issue, is that an issue where you want to make sure that it gets registered to the person that now has possession of it. Is that an issue?
Doug: That’s a good point. I always wondered what happened to them.
Miriam: I just wanted to say that home ownership is a lot of work and I know. We've lived in our home, we have a half acre of land and we've lived here for 28 years and my husband still asks who are our lawn men, what are the names of our lawn men. So when you pass away your spouse simply may not be able to take care of the house, and may not realize how expensive it is to take care of the house. So it's nice to include them, while you're still around, as part of the family work. But it may be a big weight on them to take care of a big home.
DFWBogleheads: Yeah. But even cleaning out that's a big job in itself, either just selling the home or cleaning it out and getting it ready for sale. Either way it's going to be a big job.
Miriam: Decluttering all your stuff.
DFWBogleheads: Yeah, okay. Thank you Miriam. Any last call for comments on this page. Okay the last page. So that's the end of what we're going to call the book. This is just a list of different--a lot of it, some of it’s online discussions on Bogleheads--and a lot of this is stuff I just ran across when I was trying to do a little bit of research and trying to make all my lists.
So then when we post this slide show, it's a pdf. These links will be live, so when you get the slides you can just click on these. So this was just mostly Bogleheads discussions. a couple of other articles that were along these lines, some podcasts I listened to that were very helpful, a couple books that were mentioned.
And then, okay, this last page is something that was in the RSVP form. Somebody mentioned how do I encourage my parents to document. Because we're talking about you documenting for your spouse, but then there's also the issue of if you've got parents that are still living, you want to make sure they have documented them for when you may be having to be the executor on their estate. And sometimes people are reluctant to even talk about it. Or they may agree in theory. Yeah I'm going to do it. But this is a huge job to document all this. So it's difficult.
So I ran across--there's a lot of articles, and some of these were really good--there was a YouTube video.. This podcast was really good. The first third of it was talking about this guy telling the story of what happened when his mom didn't have a will, and you can only imagine what kind of issues you run across. And then the last two thirds was a woman who had written this book called Mom and Dad We Need to Talk: How to Have Essential Conversation With Your Parents About Their Finances.
She was interviewed in this podcast about what if your parents don't plan, and how to gently encourage--and everything that I've read was like you don't want to make it about you. You don't want it to be about them making your job easier, you want it to be about you honoring their wishes, and making sure that you honor their legacy and wishes. You want to frame it in that way, but even then it's going to be, if they don't want to do it, it's going to be hard to convince them.
So Keith, go ahead, maybe you have some good advice.
Keith: Yeah I just want to add resources. I get the Oblivious Investor email and there was a link to an article, What You Need To Know About Estate Planning, from White Coat Investing. And so I clicked on it and it was, gosh, I mean I printed it out, it's a good, I don't know, 15 pages and it goes over in pretty good detail a lot of things that you should consider.
And because, as I mentioned earlier, I'm in the process of redoing ours, I'm using it partially as a guide. I apologize I don't have the link that I can put into the chat. It was written February 12th of this year so it's up to date and current, and it has a lot of great information on a lot of the stuff we're talking about, in detail. Where you could, if you want, print it out and have it in front of you, maybe to follow and learn from. So I just wanted to throw that out there as another resource.
DFWBogleheads: Okay, so that was on the Oblivious Investor blog?
Keith: Yeah it was the email that he sends out. I probably got it maybe six weeks ago, four or six weeks ago.
DFWBogleheads: He references White Coat Investor, you said?
Keith: It came from White Coat Investors, yes.
DFWBogleheads: Yes, so probably on either one of those websites.
Keith: It was written by a Dr. James Dahle, White Coat Investor founder, and it's got a lot of great information on estate planning.
DFWBogleheads: Great, that sounds very helpful. Okay, well that's our last slide. So if anybody has any final comments. And then we're going to make sure we save the chat because there's a lot of information. Everybody's been entering a lot of really helpful links and information and stuff in the chat. Is there any, just final comments somebody wants to make about just wrapping this up overall. Anything we forgot to cover.
Keith: I actually would, just if I can throw two things out there, maybe random. The first is at the beginning somebody talked about when you move to another state you want to make sure you update. That's absolutely true. And we were just on a Bogleheads meeting, maybe a month, month and a half ago, where we talked about moving, relocating in retirement. So that perfectly fits with the conversation that a lot of us are having.
But I would also add if you have some kind of a change in your life, for example you have a grandchild that you didn't plan when it was developed initially, or something else that happened. Where you want to make some changes or tweaks to your estate plans that weren't in there when you wrote them maybe a year or two or three ago. You start to have things like grandchildren etc. etc. that get added. And all of a sudden if you're leaving money you need to make adjustments to that.
The other thing I would just mention is to watch about tax changes that happen. For example, there's a change to Roth IRAs for beneficiaries, in terms of how they have to be drawn down. That's different from what it was before. There's other things that are on the table, that are being talked about. So think about how tax changes that you read about in the newspaper, or wherever you get your news from, how that might affect your estate planning. Or something that you already have written. Do you need to go back and make a tweak to it, or a change to it based on something that changed that might affect how you want to pass your money down or what have you. Because a lot, you know, sometimes it can be pretty impactful dollar wise. And you want to make an adjustment to that. So just a couple of things to think about as you maybe already have an estate plan but you need to make adjustments to it.