In Your Interest – by Valerie Rumbough

Do I have to tell my children everything about my finances before I die?

Valerie Rumbough

Many adults are wary of sharing intimate details about their assets and liabilities with their children for various reasons. However, when they pass away, it is extremely important that the children, or at least the personal representative, know about their financial affairs to adequately distribute their estate according to their wishes.

There is a simple solution to this, and I would encourage everyone age 18 and older to do this.

Start by gathering all of your important papers, such as your will and other legal documents; your mortgage, deed, and titles to other assets; statements on bank and brokerage accounts; credit card numbers, etc.; and place this information in one place, such as a three-ring binder or folder. Put other information in that folder, such as the names of your CPA, attorney, and other people that need to be contacted in the event of your death. If you have preferences for your funeral, write those down.

Place the notebook in a secure place in your home. Be sure to only have copies of the important documents, and place the originals in your safe deposit box. Then all you need to do is to tell your children one thing: “If anything happens to me, everything you need to know is in the notebook located at (you fill in the blank).” This is extremely helpful for several reasons.

First, you provide needed information when they need it and not before. Second, they only have to remember one thing, instead of having to memorize everything about you. Third, it helps them greatly at the time they need it by having everything in one place. They won’t have to dig through all of your files to find things important to your estate disposition. These tips are certainly not exhaustive, but it should put you on the right track.

If you need more help with this, the Baptist Foundation of South Carolina has free booklets you can use to help you gather all the important information you need for your notebook.

This is an extremely sensitive subject, but the above tips should help make matters easier.

Editor’s note: In accordance with IRS Circular 230, this article is not to be considered a “covered opinion” or other written tax advice and should not be relied upon for IRS audit, tax dispute, or any other purposes. Rumbough, CPA, CFP, is vice president of finance with the Baptist Foundation of South Carolina. For more information, call 800-723-7242.