After putting it off for way too long, I am going to start preparing my legacy drawer. I have already done the basics. I have term life insurance so my family will be able to go on financially without me. I have a will so that my wishes on who would care for my children and how my funds would be divided would be known. I have also made sure each account I have, including my 401k and IRA, has beneficiaries and contingent beneficiaries so that these funds can pass to them outside of probate (check with your estate lawyer to verify this – don’t take my word) so that my wife won’t be waiting for a court to act before she can access our accounts. I have not put together a legacy drawer yet, however.
A legacy drawer (or folder, or shoe box) is where you put everything people will need in one place so that if you die unexpectedly (or expectedly, even), everything can be found and some sense can be made of what to do with the wide variety of things you leave behind. Think about it – if you died right this instant, having a stroke while reading this sentence, would people know where to find your insurance policies? The keys to your car? The safe deposit box you have? The title to your house? The boat you have on the lake? The mason jar of gold coins you have buried in the backyard? Your will? No? Then you also need a legacy drawer.
A legacy drawer is also a way to say “I love you” to the spouse you leave behind, or “Thank you” to your personal representative. They are going to be going through a lot of grief. They may not even want your stuff but they are willing to take care of things in your memory. At least you can make things as easy as possible so they aren’t cursing your name as they search for the deed to your home.
Here’s what needs to go into a legacy drawer:
1. A copy of your will (original if possible).
You made a will, but if you’re gone and no one can find your will, you might as well have not made a will, which means the state gets to decide what happens to your children and your things. Put a copy of the will here, either an original (since an original will be needed to be filed with the courthouse) or a copy and information on where an original will is located. If you do include an original, you may want to have another original copy in another location in case there is a fire, tornado, or other event that destroys your legacy drawer. Think about sending a copy of your will to your personal representative – the person you want to take care of your estate – when you make the will so you know they’ll have a copy. Maybe even discuss it with them so things are clear.
2. Any trust documents, if you have a trust.
Like the will, if no one can find the trust documents, they do you no good. Put a copy in here as well.
3. Details on any life insurance policies.
You don’t want your spouse or the person who is supposed to raise your children searching around through your papers to find life insurance policies. Put all of the policies, or at least a copy, in the legacy drawer.
4. A list of all of the things of value you have and instructions on how to find them/who to contact.
List all accounts, collectibles, real estate, and anything else of value. If you have a first edition of Superman in your closet, your personal representative may just throw it out or give the whole closet away.
5. Info on how to get rid of hard-to-sell items.
If you have an item that is very valuable to some people, like a rare Persian rug, leave instructions on who to contact to sell the item. Otherwise it may go at the yard sale for $5. Remember that things are only worth what you can sell them for.
6. Info on you children.
Imagine how difficult it will be for your children and the people you have asked to take them if you and your spouse both die. A short letter giving details on their hobbies, mannerisms, favorite (and least favorite) foods, dreams and goals, and other information may make the transition easier.
7. Info on any safe deposit boxes.
Safe deposit boxes are great ways to keep things safe from fires and thieves, but no one will be able to find them if you just have a key in your sock drawer. Leave information on where the box is located, and maybe give the spare key to your personal representative with the copy of your will.
8. Information on how to unwind any investments.
If you have a lot of complex investments such as partnerships, options, and junk bonds, it could be a disaster if you die suddenly. Leave instructions on what should be sold immediately and what can be left on autopilot.
9. Any important papers.
This includes your mortgage paperwork or, hopefully, the deed for your house, titles to cars and other property, savings bonds, stock certificates, and the like. For security, you might want to have these papers in a safe deposit box with a note about the safe deposit box in the legacy drawer.
10. A letter.
It’s always best to say what you need to say while you’re alive, but if there are things you’ve left undone or things you would like to say one more time to someone special, think about leaving a letter for them in your drawer. It might make all the difference.
I’m going to get started on my legacy drawer this weekend. Think about starting on yours.
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Disclaimer: This blog is not meant to give financial planning or tax advice. It gives general information on investment strategy, picking stocks, and generally managing money to build wealth. It is not a solicitation to buy or sell stocks or any security. Financial planning advice should be sought from a certified financial planner, which the author is not. Tax advice should be sought from a CPA. All investments involve risk and the reader as urged to consider risks carefully and seek the advice of experts if needed before investing.