Make things easier for your family — organize your files

Making things easier for loved ones is one of the most important reasons for estate planning. You may have already taken some steps in building your plan by creating important documents such as a Last Will and Testament, trusts, and a Letter of Final Wishes, as well as a power of attorney or health care proxy. There is, however, one additional step you should take for them and for those tasked with administering your estate: clean out and organize your files.

Having served as an executor for many of my clients over the years, I understand the burden and stress that unorganized documents can create. I also recognize that during your lifetime, you'll probably accumulate and store a tremendous amount of paperwork in different formats and locations. Though organizing these documents may not be high on your priority list, it can greatly make a difference in the lives of those you love.

Here are some helpful suggestions on how to go about organizing your documents:

• Gather all your important documents. This might include your estate-related documents, banking and investment statements, tax documents, home records, and insurance policies.
• Decide what you can keep. You can find plenty of resources online that offer retention guidelines for various types of financial documents.
• Determine if your documents are self-explanatory. If they're not, create descriptions to accompany them.
• Centralize your records. Try to keep all your important documents in one secure place.
• Create a consistent format for your records. For example, you can put your home documents in one file and your estate-related documents in a separate file.
• Shred outdated/unnecessary documents. This will save space and ensure your personal and account information doesn't end up in the wrong hands.
• Archive documents for easy access and updating. I often suggest digital archiving.
• Create a summary for reference. This will make it easier for your family members to keep track of the information available to them. If you add or change something, be sure to update your summary.
• Make your files accessible. Ensure the appropriate people know how and where (on your computer or in filing cabinets) they can access your files.

The work you do in organizing your important documents today will go a long way in easing the burden for your loved ones upon your passing. That is what effective estate planning is all about.

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