There have been a few helpful threads like the one running now:
http://www.early-retirement.org/forums/f28/the-in-case-of-death-plan-96695.html#post2203818
And since I'm presently helping DW in closing out her Mother's estate, a few other related things come to mind. Specifically, I'd like to make settling
my/our estate as easy as possible for my heirs. Along with the big ones (like in the above thread, documenting our accounts, locations and worth/story behind valuables, etc) there are a lot of little things we can do. Nothing earth shaking, but why not make things easy for your heirs? They may be at a stage of their life where they are very busy, and every little thing takes time. Every little thing adds up. The basic premise is, as Thoreau would say "Simplify, simplify!".
Some of these may have cons I have not thought of, so please jump in if you see downsides.
A) Executor/Trustee - How about naming just one, with named successors in place in case that one cannot/will not serve? Co-trustees sounds good in theory, with an odd number for tie-breaking, but in practice, it makes things difficult. In our case, one of the co-trustees is out-of-state, and travels a lot. So getting signatures, mail, etc, and just organizing things in general becomes much more difficult.
Maybe even have a form already filled out when you get your will/trust done, so that each trustee could sign away their rights to the next in line, and just get that signed/notarized. That would save the heirs a trip to a lawyer to get that done.
Maybe it seems risky to put it on one, but we are thinking of this, making it clear to our kids that they are expected to work together, but this means only one signature/visit required for handing paperwork. Who knows if your selected trustee will be out of state when you pass? Being out of state does complicate things.
And in that “Death Letter”, it would also be helpful to spell out some of the details I had to go learn - like exactly when/how to file the Will in your State/County residence, How to obtain the EIN, etc. plus the current sources for this info, in case it changes.
B) Leave Grandchildren out of your will/trust? Fortunately for us, all the grandchildren (of DW's Mother) are past minor age, but still, the fewer beneficiaries you need to deal with the simpler. Let the parents deal with it. This would have been even more involved if her IRA had named the trust as a beneficiary - we would have had to get each grandchild to set up an Inherited IRA?
C) Consolidate! When FIL passed, they had accounts all over the place. You need to visit each bank, submit the paperwork showing you have authority, then they usually say “come back after our legal department reviews this, etc....”, make another appointment, etc. It would have been so much simpler to consolidate these when convenient and while he was still around and of sound mind. Fortunately, we did get this done before MIL passed. Except for her local bank checking account (with my DW as joint/wros, everything was at Fidelity. Still, many little things to follow up on.
As an example, DW is one of three beneficiaries on her Mother's IRA, and must now take RMDs (in 2020, the 2019 RMD was already completed) based on the inherited table and her (DW's) age. After being split among the other heirs, this isn't a large amount. I'm planning on taking as large an RMD as we can w/o getting to a higher tax bracket, just so we can zero it out so there is one less account for our heirs to deal with.
E)IRAs - As mentioned in B, if you do include a larger number of beneficiaries in your will/trust, consider naming only primary beneficiaries for your IRAs. This avoids needing to set up Inherited IRAs for all.
F) Insurance policies - If you still have life insurance, consider just cashing it in, especially if it is a small amount. That will be just one less thing for the heirs to have to call in, obtain the forms, figure out how to fill them out (they manage to make it fuzzier than it should be - just exactly what do you want for entry xyz?), mail in with certified copy of Death Certificate, etc. Wait for checks to come in, deposit checks in the named beneficiary account, then distribute as needed. MIL had two small policies ($2,000 and $5,000 face), taken out in 1970's 1980's. Why such a small amount? Really makes no sense, this wasn't “bury me” money for them.
G) As you consolidate or cash out things, mark any old paperwork you wish to hold onto as “OLD - transferred this Bank ABC account to Bank XYZ account # in 2012”. Otherwise, someone going through this old paperwork may think there is an active account they didn;t know about.
H) While I really appreciate that Vanguard forced other companies into providing low cost index funds, when it comes to some of this, having access to a local Brick & Mortar office can be helpful. You may need medallion signatures for some of this otherwise.
It could also make things smoother if each of the heirs already had accounts at the same financial institution your main accounts are at. That can make managing the transfers to heirs easier, and they won't be dealing with setting these accounts up at the same time they are dealing with everything else.
Anything to add/change?
-ERD50