Although details of your legal and financial information are meant to be confidential, don’t keep it a secret from your spouse or beneficiaries. Creating a personal document locator will guide loved ones to essential information when it is needed.
The personal document locator is a detailed list of where you store important records and identifies your primary advisers and contacts. It may help provide access to benefits that may otherwise go unclaimed, reduce professional fees and ease stress during a difficult time. Plus, you will have a convenient reference for all your important information, consolidated in a single location.
This project requires you to face your mortality and will take some time. Keep in mind that the more challenging this task is for you, the more valuable the document locator will be to your heirs. To start with, consider what documents are needed, where they are kept and who should have access to them.
First, create a list of important documents and check off the items that need to be included. At this point, don’t worry about where the documents are located, just recognize the ones that apply to you. Next, identify and verify the location of the documents. This is the opportune time to review them to be sure they are current and to decide if you want to change where you keep them. When making this decision, consider privacy, access vs. security, timeframes, personal finances and liquidity needs.
While you have your important documents in hand, consider scanning them and storing those images on a separate medium such as a thumb drive in case you ever need to replace the originals. This can be a great time to make copies (front and back) of credit cards, health insurance cards, driver’s license, passports, etc. Not only does this create an inventory for your beneficiary or representative to work with, but can be useful if they are lost or stolen. There may also be insurance associated with some credit card and bank accounts.
A letter of instruction is optional. This gives you the opportunity to name who needs to know and when they need to know it. This is not a legal document, it simply instructs the person you trust with your locator to give information as you direct.
You may consider appointing a legal and/or financial professional to be the keeper of your document locator. The role of this person is to provide access to your information based on your letter of instruction. A trusted friend or family member may fill this role as well.
Things to consider:
- This person should be able to store your information in a safe and secure location.
- They must be willing to participate to some extent in updating the information as needed. A professional will likely initiate an annual review.
- They will meet with your beneficiaries at the designated time. A person with some emotional detachment might provide more objective help.
This is a very loving thing to give … and receive. This is a terrific way to begin otherwise difficult conversations with parents and adult children. I encourage you to create the document as a gift to those who will settle your affairs and to enjoy the organization it brings to your own life.