Some financial professionals believe that life insurance should be viewed as "love insurance." Though it sounds like a cliché, it certainly has a tremendous amount of merit. When you really think about it, what better gift is there to give your family and loved ones upon your death than a large sum of money to be used for such things as income replacement, college tuition, retirement, taxes or estate taxes, charitable gifts, and more? And let's not forget that the last thing you would want to leave your family with at a time of such emotional loss and grieving is the burden of having to deal with financial decisions and pressures.
Well, here is an even better idea. Instead of leaving a "love insurance" policy (which I firmly believe should be an integral part of most financial plans), why not leave behind an even better gift? What I refer to as a "love drawer".
What is a love drawer? Simply put, this is a drawer that whoever you choose can turn to when you pass on to find complete and simple details, as well as your instructions, for all of the aspects of your last wishes, financial affairs, instructions, personal messages, as well as your end-of-life plan and preferences
So, what are some things to consider keeping in this love drawer? The following are a list of most, but certainly not all, of your money matters that will need to be addressed:
First and foremost, two things should be included:
1. The name, firm name, address, and phone number of your estate planning attorney.
2. Your actual will or trust. Note: If this is a copy, be sure to note the exact location of your original signed will or trust.
Whether you have an estate planning attorney or not, creating a will or trust is the first and most important step in the planning of your estate, as it becomes the foundation for all of your financial affairs. One of the reasons this is a critical first document to have in your love drawer is because it spells out the details of your last wishes, also referred to as your last will and testament. Also, the will or trust states whom you have chosen to be your executor or trustee to govern your assets according to your wishes, as well as the person (or persons) you've appointed to be the guardian of any children who may need assistance
The name, firm name, address, and phone numbers of all of your insurance agents, including car, home, life, disability, annuities, and medical insurance. Note: If you do not have a personal agent/representative for any of these policies or contracts, be sure to list the policy or contract numbers, copies of these policies or contracts, as well as the phone number for the home office of each company's policy or contract.
IRAs and life insurance.
Be sure to not only list the company or your representative's name, account and policy numbers, and phone numbers, but also be sure you have listed currently contingent beneficiaries on each IRA and life insurance policy.
The name, firm name, address, and phone number of all of your financial advisors, including stockbrokers and financial planners. Note: If you do not have a personal agent/advisor for any of these accounts, be sure to list all of your account numbers, the investment companies or banks who hold these assets, copies of your most recent statements, as well as the phone number for the home office of each company.
The name, address, and phone number for the human resources department of your current employer.
The name, address, and phone number of the Social Security Administration, as well as a copy of the most recent statement you have available.
The complete details of all debts and their corresponding contact information; including mortgages, home equity loans, car loans, student loans, credit cards, or personal loans.
Copies of all important documents, such as drivers license, passport, social security card, and birth certificate.
Deeds or titles.
Copies of important deeds and titles for assets such as houses, cars, boats, etc.
I think it is a good idea to note if you have any preferences regarding your burial, such as being cremated or buried, your preferred location, as well as any preplanning details and records.
Although this is not necessary, some people (including myself) like to leave a personal love note to important people in your life, such as a spouse, parent, or child. There is no financial reason for this love note, but some people find it helpful to leave behind their loving thoughts, words, ideas, and appreciation.
Also, I strongly suggest that you inform at least three people that you love and trust, regarding the whereabouts of this drawer. This can consist of your spouse, parents, children, friends, or even your financial advisor or attorney. In addition, even though it may seem obvious, I would ask them to please respect your privacy and never open this drawer until it is absolutely necessary. These entrusted loved ones will be the ones who help ensure that someone will be there to step up promptly and act upon the details and instructions of this drawer.
Lastly, my advice is that you update this love drawer at least every two years. As all we know, each day that life passes by, things change. There are many constantly changing pieces of our financial lives, such as taxes, estate taxes, family, age, health, wealth, our final wishes, etc. Therefore, we need to not only review and revise our financial affairs on a regular basis, but also our love drawer. Regularly updating this love drawer will reflect any financial matters that have been added, revised, or that need to be removed.
A love drawer is not very difficult to establish, and should only take a day or two. But regardless of how much effort and time it may take, I think you will find that once you have created it, you will consider it to have been time well spent for both you and your family.
I truly believe that you will experience a tremendous peace of mind in knowing that your loved ones can easily handle all of your financial affairs without financial pressure, confusion, or disagreements.
Your loved ones will have the gift of being able to remember you in a way that you would want, as kind, generous, giving, and thoughtful. More importantly, it can eliminate many of the emotional and financial pressures surrounding such a difficult time, and allow them to focus on what's most important, which is celebrating the wonderful memories of your life.
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