Cautionary Tales - Avoiding the Post-Death Scramble - Episode 232

Hey there, Legal Tea Listeners –This is your host, Jenny Rozelle! Today’s episode of Legal Tea is the “cautionary tales” topic. And on these “cautionary tales” episodes of Legal Tea, we normally talk about real-life cases with real-life clients that are things me or my office have worked on -or they are things that I think are generally good things to be aware of, that way you don’t turn into a cautionary tale on my Legal Tea podcast one day! So… today’s episode, today’s topic is more of a general thing I see in practice all the time, which is when families and clients are left scrambling after a loved one has passed away. Now usually there is always a bit of scramble, because someone passes away, it’s not like things are unicorns and rainbows – there’s still a bit of work to do, so what I am talking about today is more of the extra, extra not-great scramble that is sometimes left. I’d argue that it’s avoidable, but some just don’t get things set up to avoid it. I hope that today offers some practical tips and tidbits that will help at least one family avoid one headache in the future… so let’s dive in!

Let me start by painting you a picture of what this scramble looks like. I get a call from a family member – let's call her Sarah. Her dad just passed away unexpectedly, and she's trying to handle his affairs. She knows he had bank accounts, but she's not sure where. She thinks he might have had a retirement account from his old job, but which job? Was it the one from the 80s or the 90s? She found a life insurance policy in a drawer, but it's from 2003 and she has no idea if it's still active or if he changed beneficiaries after the divorce. Oh, and his computer is password protected, all his bills are online, and she can't access anything. She's calling my office asking what to do, and we can hear the exhaustion and frustration in her voice. This is week two of her trying to piece together her father's financial life like some kind of detective novel, except it's not fun, it's overwhelming, and she's grieving on top of it all.

Now contrast that with another client family we worked with. When Mom passed away, the kids found a binder. Just a simple three-ring binder labeled "Important Information." Inside was a list of every bank account with account numbers, every investment account, insurance policies, the deed to the house, her Social Security number, a list of monthly bills and how they were paid, passwords to her computer and email, and even the contact information for her financial advisor and attorney. The family still had to go through the legal process, sure, but instead of spending months hunting for assets and trying to guess passwords, they spent a weekend getting organized and then could actually focus on grieving and supporting each other. That's the difference we're talking about today. So let's get into the practical stuff.

First up, let's talk about bank accounts and financial accounts in general. I see this constantly – people have accounts scattered everywhere. Maybe you opened a checking account at one bank because they were offering a bonus. Then you got a savings account somewhere else because the interest rate was slightly better. You've got an old 401k from a job you left fifteen years ago. There's a CD that auto-renewed at another institution. Before you know it, you've got seven, eight, nine different financial institutions, and that's not even counting investment accounts or credit cards.

Here's my advice: simplify. I'm not saying you need to have everything at one single bank, but ask yourself – do you really need accounts at a zillion different banks? For most people, you can consolidate down to one or two primary institutions. Close or move accounts you're not really using. Not only does this make your life easier now, but it makes things so much simpler for your family later. And here's the key part – once you've simplified, document it and write it down. Create a list of every financial account you have. Include the name of the institution, the type of account, the account number, and the approximate balance. Update this at least once a year. We tell clients to do it when they do their taxes or on their birthday – just pick a regular time and update it. You don't need to be exact to the penny on balances, but ballpark figures help your family know what they're looking for.

Now let's talk about something that's become a huge issue in the last decade or so – digital access. Nearly everything is online now. Your bank statements, your bills, your tax documents, even your photos and important files. And it's typically password protected, which is great for security, but terrible if your family needs to access things after you're gone. We had a client whose husband passed away, and she couldn't get into his email. Sounds simple, right? Except his life insurance information was sent to that email. The monthly mortgage bill was sent to that email. Etc. She ended up having to go through a lengthy process with the email provider, providing a death certificate and legal documentation, and it took weeks. Meanwhile, she's worried about whether bills are being paid and whether she's missing important deadlines.

Practically speaking: create a document with your important login information. Now, I know what you're thinking – isn't that a security risk? And yes, you need to be smart about it. Don't just leave a document labeled "All My Passwords" sitting on your desktop. But you can keep a secure document, maybe in a fireproof safe, or use a password manager and make sure your trusted person knows the master password. Include logins for email accounts, bank accounts, investment accounts, insurance company portals, utility companies, and any other important accounts.

Now, let’s zoom out for a second and talk about the bigger picture of what information your family needs. Beyond just account numbers and passwords, there's a whole bunch of other stuff that's incredibly helpful to have documented. Beyond the basics like your legal name, Social Security number, current and former addresses going back at least a few years … also document your important advisors and contacts. Who's your attorney? Your financial advisor? Your accountant? Your insurance agent? Include names, phone numbers, and email addresses. Don't forget about the physical stuff too. Where's the deed to your house? Where are car titles? If you have a safe deposit box, where is it and where's the key? If you have valuables, where are they?

And here's something people forget – document your digital life. What email accounts do you have? Do you have social media accounts that need to be closed? Do you have subscriptions that are auto-renewing? We worked with a family that discovered their dad had been paying for a streaming service and a software subscription for years that no one even knew about. After he passed, those charges just kept going for months before someone noticed.

Now, you might be thinking – do estate planning documents handle any of this? Well, yes and no. Your will, your trust, your power of attorney, your healthcare directive – these are all critically important documents, and you absolutely should have them. But here's the thing: these documents say what happens to your assets and who makes decisions, but they typically do not tell your family where everything is or how to access it. I'll give you an example. Your will might say that your estate gets divided equally among your three kids. Great. But if your kids don't know that you have a savings account at a small local credit union, or that you have a life insurance policy through your old employer, those assets might never be claimed. So yes, of course get your estate planning documents in order – but also create a practical information guide for your family. Think of your estate planning documents as the legal framework, and this information guide as a helpful instruction manual.

So practically speaking, how do you organize all of this? Some people like a physical binder – old school, but it works. Get a three-ring binder, some dividers, and create sections for financial accounts, insurance policies, estate planning documents, digital access, property information, and important contacts. Put everything in there, store it somewhere safe, and tell your trusted people where it is. Some people prefer digital. That's fine too. You can create a document on your computer, or use one of the many online services designed for this. Just make sure it's backed up and that someone knows how to access it. Whichever method you choose, the key is to actually do it and to keep it updated. Set a reminder on your calendar to review and update this information every year. When you open a new account, add it to the list. When you close an account, remove it. When you change a password, update it.

Now, I know a lot of people listening to this are thinking "Yeah, yeah, I should do that" and then they're never going to actually do it. Why? A lot of different reasons. It’s a lot of work. Also,  thinking about death is uncomfortable. Because you're busy and it's easy to put off. But here's the thing – not doing this doesn't protect you from anything. You are not going to jinx yourself by getting organized. And the uncomfortable feeling you get from thinking about this for a couple of hours? That's nothing compared to the stress and frustration your family will feel trying to piece everything together while they're grieving.

I also hear people say "My family will figure it out." And sure, they probably will eventually. But why make it hard on them? Why force them to spend weeks or months playing detective when you could spend a few hours making their lives easier? Think of it this way: this is one of the last gifts you can give your family. You're giving them the gift of not having to stress about the logistical nightmare. You're giving them the gift of time – time they can spend grieving, supporting each other, and remembering you, instead of frantically searching through paperwork and making phone calls. So, I’m done blabbing now – the message here is simple: get organized, simplify where you can, document everything, and give your family the gift of not having to scramble. Trust me, it's worth it.

Alrighty, let’s shift to a sneak peak of next week, which we’re circling back to the “current trends” topic where we talk about things that are going on currently that impact my estate and elder law world – or maybe, things that I have stumbled upon on the news or social media that is relevant to this podcast. Next week, we are going to dive into what may play out with the double homicide of famed director, Rob Reiner, and his spouse, Michele Singer Reiner – and how something called the Slayer Rule, which we’ve talked about on here before, may play into it. So, until then, Legal Tea Listeners, be well and talk soon!

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