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Now That I Signed My Estate Planning Documents What Do I Do With Them?
Nothing is more frustrating than looking for something that has been misplaced. We all have been through this experience. We rummage through all our stuff looking for those missing keys, TV controls, or even important documents like tax information. Most of the time we find what we've been looking for. Other times we give up, only to find it later when we're not even looking for it anymore. Usually searching for misplaced items is only a temporary inconvenience and causes no long term harm.
However, the situation can be quite different when the misplaced document is an incapacitated person's healthcare power of attorney or a decedent's will. The safekeeping of estate planning documents is every bit as important as the implementation of an estate plan itself. This is because if estate planning documents cannot be located when they are needed, they are useless. For this reason everyone needs to give careful thought about how their estate planning documents should be stored and how they can be accessed when needed.
The purpose of this issue of e-Counsel is to educate you on some things you should consider when it comes to storing and accessing important documents such as your estate plan. We will also discuss how electronic storage via the Internet can provide secure and instant access to your estate planning and other important documents such as a living will, healthcare directive, and durable power of attorney for healthcare. As always, this issue of e-Counsel is only intended to be an overview of the topic under discussion and is not intended to give specific advice regarding any person's particular situation. If you have any questions regarding this e-newsletter, please do not hesitate to contact us.
Initial Considerations
As with most things in life, there is no one right answer as to how or where important documents such as your estate plan should be stored and maintained. We suggest that you consider asking yourself the following questions before you decide what to do:
1. What are the specific documents I need to store and access?
2. Where should I safe keep my original documents?
3. Who should get copies of my documents?
4. How can I ensure close to instant access to my documents?
We have found that answering these four questions helps isolate and separate the important issues that need to be addressed. For example, it is possible that different documents should be stored or maintained in different ways. Further, the safe keeping of original documents and accessibility of those documents are really two different issues. This is because oftentimes making a document easily accessible means you may not be keeping it in the safest place. In other words, you are (perhaps inadvertently) prioritizing accessibility over safe keeping when that does not necessarily have to be the case. Finally, most of the time you will not need original documents. Therefore, having copies of the documents (and who should have copies) becomes important. The originals can then be kept in a safer (but perhaps less accessible) place.
What Are The Specific Documents I Need To Store And Access?
From an estate planning perspective, look at all the documents which make up your estate plan. If you have just started the estate planning process, your estate plan is probably made up of one or more or all of the following documents:
You may also have other documents associated with your estate plan such as life insurance, beneficiary designations for retirement plan assets, property deeds, funding documents for your Revocable Living Trust, a Written List for the disposition of personal property, etc.
If your estate plan is more complicated, you may have additional documents such as an insurance trust, grantor retained annuity trust, qualified personal residence trust, family limited partnership, intentionally defective grantor trust, or any number of other planning tools or techniques which may have been implemented to help you achieve your estate planning goals and objectives.
We would suggest that you actually list these documents. This list is the universe of documents you need to store and maintain. Look at the list and ask yourself, "should any of these documents be stored or maintained differently than the other listed documents?" Although the initial answer may seem like it should be "no" because they are all estate planning documents, try to probe a little deeper.
For example, estate planning documents related to your medical and healthcare deserve special attention. If you have a living will, healthcare directive, or durable power of attorney for healthcare, you may want to consider giving a copy of these documents to your physician or internist. This could help make these documents become part of your permanent medical records. If you ever go to the hospital, on admission you will be asked if you have these documents and the hospital will want copies of them. Usually in the rush to get to the hospital, these documents are left behind. Having these documents with your doctor can help. Even better, you may want to consider storing these documents electronically so they can be securely accessed by the hospital with an Internet connection. We will discuss electronic storage of your estate planning documents in more detail later in this newsletter.
Your estate plan may also consist of a "Written List" for disposing of personal property. In Missouri, for example, a person can leave specific items of personal property to others if they have a Written List that is referenced in their will. The Written List can specify items of personal property and who gets that property upon death. The advantage of using a Written List is that it can be altered or added to without having to formerly amend your estate plan and incur legal fees in the process. To be valid, the Written List must be signed and dated. Some people with Written Lists change or add to it often since they are acquiring additional property. If this is your case, you might want the list to be more readily accessible then your other estate planning documents.
How Should I Safe Keep My Original Documents?
It may be tempting and even reassuring to keep important documents such as an estate plan at your home. This certainly makes the documents easily accessible. However, documents kept at home can be exposed to a variety of risks, including fire, theft and accidental loss. Even "so-called" fire-proof storage units vary in the degree of protection they actually provide. If you decide to keep your documents at home, it is advisable to keep them away from the elements. I would suggest a fire-proof safe or storage unit as long as you understand that certain risks will be unavoidable with the home.
For many individuals, a safe deposit box provides a more secure place for storage and safe keeping of their estate planning and other important original documents. For documents that you do not need access to often, a safe deposit box makes a lot of sense and is relatively inexpensive. You can also keep copies of those documents at home so you do not have to run back and forth to your safe deposit box. Copies of estate planning documents are usually sufficient to deal with most matters that might come up, such as funding a trust.
You should be aware that if a safe deposit box is in just one person's name, then a spouse, child or other interested party could face some obstacles in accessing its contents. Generally, in these cases, the safe deposit box will be opened in the presence of a representative of the bank or other institution where the box is maintained. The box could be inventoried and if a Will is found, the bank or institution will generally file it with the probate court or give it to the family for filing. Once the Will is filed, the personal representative will have access to the contents of the safe deposit box.
As an alternative, a safe deposit box could be jointly rented. This type of registration must be specifically noted in the rental agreement with the bank or institution where the box is maintained. With a jointly rented safe deposit box, the surviving joint tenant will have immediate access to the box upon the death of the other joint tenant. However, even though a safe deposit box is rented in joint names, that alone does not mean that all of the assets contained in the box are also jointly owned.
Some professional advisors will store your estate planning documents at their office as a convenience for clients. Some law firms, accounting firms and investment advisors have fire proof safes for this purpose. If this is something you are considering, you should ask the advisor how secure their facility is and how can you or someone on your behalf access the documents.
No matter where you keep your estate planning documents, it is important to leave a paper trail so others know where the documents are kept. Even when a person keeps their documents in a logical location, such as in a safe deposit box, a tremendous amount of wasted effort can be avoided if family members know in advance exactly where (or by whom) the documents are being kept. For example, if a safe deposit box is used, someone else should know the location of the box and its number, as well as where the key is kept.
Who Should Get Copies Of My Documents?
It is useful to look at who should get copies of your documents from two perspectives. First, which of your professional advisors should have copies. Second, which family members or friends should have copies.
We firmly believe that when a client executes an estate plan, it is important that the client's other professional advisors know and understand what was done. Having this team approach where all are knowledgeable of what was done can only enhance the planning and minimize the potential for mistakes. For example, if a client executed a revocable living trust and the client's financial advisor was not aware of this, if assets are acquired by the financial advisor, they might not be titled in the name of the trust. This could incur unnecessary probate expenses.
If you have an accountant or financial advisor, you should strongly consider giving them copies of your estate planning documents. You may even want to include them on the initial planning since they may have personal insight into your situation which could improve the way your estate plan is structured. Usually electronic copies of documents are sufficient for professional advisors. Further, if you store your documents electronically, you can give your trusted advisors access to your "virtual" storage cabinet. You can also add other documents such as tax returns and the like so all of your professional advisors are up to date and current on your personal and financial situation.
What, if any, family members or friends should have copies of your estate planning documents is also a decision you need to make. Sometimes people want a close family member (such as an adult child) to have copies of their documents. This is perfectly acceptable and, as noted above, someone should know where your documents are kept.
Your estate plan has probably named others to serve key roles in your planning like guardians for your children, trustees of trusts that have or will be established, personal representatives of your estate, etc. It is often helpful to look at the specific documents involved in order to determine who should or may get a copy:
Last Will and Testament. A will appoints a personal representative. A personal representative is the person responsible for administering an estate. Oftentimes an initial personal representative is appointed followed by a number of successors in case the initial representative is unable to serve. It is always advisable to tell the person you select to serve as personal representative (and successors) that you want them to serve and get their commitment that they will serve. In addition, you can certainly give them copies of your Will, but it is not necessary. Often, people will only give a copy of their Will to the initial personal representative, but not any successors.
Wills also appoint guardians for minor children. It is not necessary that a guardian have a copy of your Will, but once again you should tell the person you select to serve as guardian (and successors) that you want them to serve and get their commitment to serve.
Revocable Living Trust. A Revocable Living Trust appoints trustees to administer the assets that are titled in the name of the trust. Typically, when a client establishes a trust, he or she is the initial trustee. However, others are appointed to serve as successor or back-up trustees if the client cannot serve or upon the client's death. As with personal representatives and guardians, it is advisable to tell the person you select to serve as successor or back-up trustee that you want them to serve and get their commitment that they will serve. In addition, you can give them copies of your trust, but it is not necessary. Often people will only give a copy of their trust to the first successor trustee, but not any other successors.
Beneficiaries of a Revocable Living Trust are the people who will get the assets in the trust after your death (like your spouse, children, etc.). Beneficiaries do not need to receive copies of your trust unless you want them to have a copy.
Durable Power of Attorney for Financial Matters. A durable power of attorney appoints someone else (know as an "attorney in fact") to make financial decisions for you. In addition to telling the people you have chosen as attorney in fact that you have selected them, it is advisable that they get a copy of this document if they currently have the power to act on your behalf.
Living Will and Health Care Directives. A living will and health care directive states your medical wishes in the event you are in a persistent vegetative state or death is otherwise eminent. As noted above, consider giving a copy of this document to your doctor. You should also make others aware of your decisions regarding life support. In this regard, it is advisable that your spouse, adult children or close friend have a copy of this document (or at least let them know where it is stored and how it can be retrieved).
Durable Power of Attorney for Health Care. A durable power of attorney for health care appoints someone else (known as an "attorney in fact") to make health care decisions for you if you cannot make them yourself. Like your living will and health care directive, consider giving a copy of this document to your doctor. You should also give a copy of this document to the person you have appointed as your attorney in fact (or at least let them know where it is stored and how it can be retrieved).
How Can I Ensure Close To Instant Access To My Documents When Needed?
Keeping your documents safe is important, but you also want your documents to be readily available when needed. Although a safe deposit box provides for secure storage, it is not always convenient. If you need to look at your documents, you need to go to your safe deposit box. An even more basic issue is the location of the safe deposit box key. If the key cannot be found at the time that access is needed, the only alternative may be to have the box drilled open, which is generally an expensive proposition.
Electronic storage of documents can provide for easy and instant access to your estate planning documents. As a value added service for our clients and friends, we provide a web-based document storage and retrieval system known as LegalVault™. This special and unique service allows individuals to easily and securely store and maintain important documents as well as vital medical and asset information for convenient retrieval (through a secure user name, password and PIN number) at a later date. For healthcare documents and medical information, an entire medical access and retrieval system is created so that your medical wishes are followed in the event of a disability and the potential for hospital error is reduced.
The web-based storage system can be used to store any type of documents or information, including:
Healthcare Documents and Medical Information. Living Wills, Advanced Directives, Durable Powers of Attorney for Health Care and other medical information (such as allergies, prescriptions or medications you take, medical conditions, physician information, etc.) can be stored in the HIPAA-compliant LegalVault™. This allows you to have your healthcare documents and medical information at your fingertips, no matter where you are.
In the event you require immediate medical care, especially when being treated at an unfamiliar hospital, you or your loved ones can simply present the attending physician with a wallet card which we provide you with. This card lists allergies, emergency contact information and instructions on how to obtain all of your healthcare documents and medical information. By providing your caregivers access to your vital medical information, you can help prevent hospital errors which can occur based on a diagnosis being made without having complete medical background information.
If you store financial or other non-medical documents in LegalVault™, hospital personnel will only have access to view your healthcare documents. This is because LegalVault™ has a two-tiered access system which only allows healthcare providers to view medical documents and information.
By storing your healthcare documents on LegalVault™, you no longer have to carry those healthcare documents with you when you travel and can have peace of mind that your medical wishes will be followed.
Estate Planning Documents. Wills, Trusts, Powers of Attorney, and other estate planning documents can be stored and retrieved through LegalVault™ no matter where you are or no matter what the time. All you need is access to a computer with an Internet connection to securely view any of your estate planning documents. For example, if you go to a bank to transfer assets to your Revocable Living Trust and the bank requests a copy of the trust to facilitate the transfer, you will have access to the trust at that moment through LegalVault™ without having to bring or go get a copy of the trust. You can also, if you desire, grant access to your other professional advisors (such as your accountant or financial planner) so they can have access to your estate planning documents.
Tax Returns and Financial Information. Tax returns, financial information (such as personal balance sheets or investment information), property deeds, retirement accounts and beneficiary designation information, insurance information, and professional advisor contact information can likewise be stored on LegalVault™ for easy access and retrieval. In the event of your death or disability, this allows your loved ones to have all your information in one convenient place without fear that something has been forgotten.
LegalVault™ has been designed with security in mind. These advanced security and privacy safeguards include:
- HIPAA-Compliant SSL connection
- Detailed logs recording login and modifications
- Sophisticated 256-Bit encryption technology
- CAPTCHA login system
- Enterprise-class multi-layered backup system
If you would like to learn more about LegalVault™ and how it works, please do not hesitate to contact us or request a copy of our LegalVault™ brochure.
We trust you have found this issue of e-Counsel to be interesting and informative. If you have any questions regarding anything contained in this issue or if you have any ideas as to how we can improve our newsletter, please do not hesitate to contact us.
Under U.S. Treasury Department guidelines, we are required to inform you that (1) any tax advice contained in this communication is not intended or written to be used, and cannot be used by you, for the purpose of avoiding penalties that may be imposed on you by the Internal Revenue Service, or by any party to market or promote any transaction or matter addressed herein without the express and written consent of the Richard C. Petrofsky Law Office and Helfrey, Neiers & Jones, P.C., (2) the Richard C. Petrofsky Law Office and Helfrey, Neiers & Jones, P.C. imposes no limitation on any recipient of this tax advice on the disclosure of the tax treatment or tax strategies or tax structuring described herein, and (3) any fees otherwise payable to the Richard C. Petrofsky Law Office or Helfrey, Neiers & Jones, P.C. in connection with this written tax advice are not refundable or contingent on your realization of federal tax benefits from the advice contained herein.
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