Updating The Legacy Drawer

The top left drawer in my office desk is a special drawer.  It contains perhaps the best present I have ever/ will ever give to my wife.  This drawer is the legacy drawer which is filled with the information needed to help ease the financial transition that would occur if I were to pass away.  It’s been a while since I created this drawer and its about time to go through it again.

Contents:

  • Life Insurance Policy(s)
  • List of Account and beneficiary information for all retirement accounts, HSA, etc.
  • Last Will and Testament
  • Detailed Financial Plan covering from present through retirement

In addition to financial information the drawer also contains sealed letters to my wife and kids to have from me in the event of my passing.  A few years ago when I started travelling more for work I recorded myself reading the kids bedtime stories.  I have a dvd copy of this in the drawer as well.

It has been almost two years since I first built this drawer, and even though that isn’t a huge length of time, there is information that needs to be changed.  Having incorrect information in this drawer can cause a substantial amount of extra stress when the time comes for it to be needed. Since Mrs. C. isn’t into finances at all, I have a detailed plan typed up for her to follow.  Many aspects of our lives have changed over these two years, most notably the passing of her sister.  This event highlighted the importance of having a good plan together in the event that one of us passed away.  We switched some of our retirement accounts as well and made some tweaks to our tax planning strategy.  All of this information needs to be reflected in the legacy drawer.

When I started going through the drawer this morning the first thing I noticed was that I had allowed the drawer to also become a “junk drawer”, filled with odds and ends, screws, tape, pens, random writings and paperwork.  None of these things should be in there, the whole point of the legacy drawer is to isolate the really important information in one easy to access spot.  What’s worse than the clutter is my random financial planning notes that ended up in the drawer. It’s possible some of these crib notes could be taken as part of the financial plan.  Before I even get started on updating anything I have to clean all this junk out.

Shortcomings:

I hate to admit this but I have yet to set up a living will and revocable living trust.  A living will is the set of instructions concerning care for myself if I were incapacitated, i.e. living on life support or in a vegetative state.  My family and friends know that I would not want to live that way and if there is little to no chance of a full recovery I would not want life support.  In such a situation though without the directive in writing, there could be issues with having these wishes carried out, especially if loved ones disagreed with this plan. It’s one piece of paper, but it is just as important as a last will and testament and a life insurance policy.

A living revocable trust allows for assets put into the trust to pass on to heirs without going through probate at my death.  I have heard plenty of horror stories about probate and have no desire to burden my relatives with such a process.

The whole point of the legacy drawer is to consolidate information and to ease the transition for loved ones to take on responsibilities that you can no longer perform.  Updating it with all the proper information on a regular basis will ensure that when it is needed, an extra burden is lifted during a difficult time.

Action Steps:

Do You have a legacy drawer? if so, how often do you update it?

 

John C. started Action Economics in 2013 as a way to gain more knowledge on personal financial planning and to share that knowledge with others. Action Economics focuses on paying off the house, reducing taxes, and building wealth. John uses the free tool Personal Capital to track his net worth and posts quarterly updates on his finances. Check out the Action Economics archives section for all past posts.

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