My wife and I recently went through Dave Ramsey’s Legacy Journey class. Following completion of the class, we sat down together with a cup of coffee and discussed how we could prepare for the worst case scenario. As you can imagine it was not the most riveting conversation to start the day off, but one that we are thankful we had.
The Legacy Class recommends creating a ‘Legacy Drawer’. Basically, this Legacy Drawer contains your family’s important information in the event something should happen to you. Here is an outline of the contents and how to organize:
Cover Letter – This is simply a letter stating the purpose of the Legacy Drawer. Nothing fancy, just a way to introduce your loved ones to the contents of the drawer.
Will and Estate Plans – All information pertaining to your will and estate, including names of the executor and Power of Attorney should be located in one file
Financial Account – Anything that has money in it and your name on it should be listed in the Legacy Drawer. This includes account names, amount and account numbers.
Funeral Instructions – All details and specifications for funeral plans should be listed so the family can fulfill your wishes. If you are married, you need one for you and one for your spouse.
Insurance Policies – All insurance information, including health, car, disability, term life, etc., should be combined into one single document for easy reference. List the type of insurance, who the policy is for, contact information and policy numbers.
Important Documents – Any legal or other important documents you have should be noted in the file. This includes deeds, birth certificates, Social Security cards and titles.
Legacy Letters – Since the intention behind the Legacy Drawer is to keep your legacy going after you've passed away, it's a great idea to include letters to your loved ones.
Monthly Budget – Add a copy of your written budget, so your spouse or loved ones know how to operate your household once you're gone. This will help your family keep track of bills and focus on more important things.
Tax Returns – Keeping tax returns in your Legacy Drawer is like an insurance policy for yourself in the event that you get audited from the IRS. Hopefully you never have to pull them out, but if you do, at least you are prepared.
Safe Deposit Box – Keep copies of all your Legacy Drawer papers in a safe deposit box—you can never be too careful. Include information in your Legacy Drawer on where your safe deposit box is and who has access to it.
Passwords – Write down all passwords, combinations, usernames and PIN numbers. This information allows your loved ones access to any documents, money or information that is left when you are gone.
I recommend placing a hard copy in a fire proof safe in your place of residence and a soft copy placed on an external hard drive stored in a safety deposit box (post office or bank). This is not a fun task, but you and your loved ones will be very thankful that you took the time out to do this.