How to organize your finances by Parade Magazine

Get Your Finances Organized

Published: September 17, 2006

You carry your basic financial information in your head—like the name of your bank, the location of your checkbook, where to find last year’s tax return. (OK, it might take a while to put your hands on that return, but you know where to look.) But does anyone else know what you know? No? Then create a one-page crib sheet. It’s the smartest, easiest way to prepare for the unexpected. If anything happens to you, it will be vital to your survivors. And if you’re ever forced to flee a natural disaster, it will help you reconstruct your financial records.

What You Should List
Contact information. Write down the names and phone numbers of family members, your closest friend, your doctor, any professional advisers (lawyer, tax accountant, broker, insurance agent) and the person who handles employee benefits where you work.

Financial accounts. List your accounts and the institutions where they’re located. For example: “Checking and savings accounts, First Citizens Bank, 124 Main Street.”

No need to list account numbers if you put down your Social Security number; that should be enough to identify your accounts.

Where to find your important personal documents. These should include:

• Current bank, mutual fund and brokerage account statements

• Employee benefits information

• Life insurance policies

• Marriage license

• Prenuptial agreements

• Birth certificates and adoption papers

• The original copy of your will (the only copy that’s signed and witnessed). A photocopy won’t do. If your original will can’t be found, the law assumes that you destroyed it because you had changed your mind about what it said. Your heirs must convince a court that that didn’t happen. If they don’t succeed, your assets are distributed according to state law, as if no will existed.

• The forms naming your retirement account beneficiaries. It’s these forms—not your will!—that determine who gets your retirement accounts. If you don’t have your own copies, ask your account custodians for new beneficiary designation forms. “Fill out two copies,” advises Ed Slott, a tax accountant and IRA expert in Rockville Centre, N.Y. “Mail them back to the custodian with a cover letter asking the company to return an acknowledged copy for your files.”

Where You Should Keep It
Make three copies of your crib sheet. Keep one for yourself. (Tell your spouse where it is!) Give one, in a sealed envelope, to your sibling, adult child, best friend or lawyer. Mail the third to someone you trust who lives in another town—preferably one unlikely to experience the same natural disasters.

As for the documents on your one-page list, relocate them to a fireproof file cabinet, with active drawers (for current bank statements, for example) and inactive drawers (for long-term papers, like insurance policies and passports).

If you have documents stored in a bank safe deposit box in your name alone, ask the bank how your survivors could gain access to it. (Getting authorization can be time-consuming.) Better to keep documents like your will at your lawyer’s office or in a locked file cabinet at home, where they will be immediately available to your family.

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