Why You Need A Legacy Binder

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Choose FI has partnered with CardRatings for our coverage of credit card products. Choose FI and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. Disclosures.

A couple of centuries ago, Benjamin Franklin told the world that there are only two certainties in life: death and taxes.

All these years later, he's still right. When we're talking about the path to FI, we know that we need to be prepared for both.

We talk a lot about taxes when we discuss FI, but what about death? No one really likes to think about dying. However, if we don't, we're doing our families a huge disservice. It's better to prepare now than make your family try to guess what you would have wanted after you are gone.

Enter the legacy binder.

A legacy binder keeps all of your personal information and wishes for your family members after you've passed. This way they have instructions on where your money, policies, accounts, and belongings are. It also tells them how you want everything to be handled.

Death is not a subject most people want to talk about, and that’s completely understandable. But the reality is that each of us will die at some point. And given how complicated life is today, there will be literally dozens of loose ends when that happens. This binder helps your loved ones to tie everything up neatly and easily.

Table of Contents

Why You Need A Legacy Binder

It's important to have a legacy binder for several reasons.

1. It takes the stress off of your loved ones.

Whether it's expected or sudden, death is extremely difficult for family members and friends of the deceased. Having one location where they can go to know your final wishes makes a challenging time much easier.

2. It gives them all of the information they need.

A few decades ago, when someone passed away, their family members would check their desk or file cabinet for details on their last wishes, financial statements, will, etc. Now, we need to look in a computer for that information. But if your family doesn't have the right passwords, not only to the computer itself but to all the websites with your account information, they won't be able to access critical information.

3. It puts all of your wishes and records in one place.

There are a lot of people who don't even know what documents to look for when a loved one passes away, let alone where to search for them. With this binder, all of the information your family needs will be in one place. No more hunting in desks, closets, under mattresses, or in other crazy places to know what you wanted to happen after your death.

    Related: 5 Estate Planning Documents Every Family Needs To Protect Their Finances

    What Should Be In Your Legacy Binder

    When we say that your legacy binder needs to contain all of your “necessary information,” what exactly does that mean? Here's a list of the recommended documents you’ll want to include.

    • Last will and testament: If the original is on file with an attorney, include a copy of the document in your binder, along with instructions on how to access the original.
    • Other important legal documents: This should definitely include trust documents since they can have an immediate impact on your loved ones upon your death. Other documents might include a copy of any divorce decrees, legal agreements, or property deeds. It should probably also indicate the location of documents pertaining to bankruptcy or lawsuits, even if they were settled long ago.
    • Insurance policies: Make sure you have the paperwork from all of your policies, including life, home, auto, etc.
    • Bank and credit card information:  Include a copy of a recent statement from each bank account you have, and do the same for the credit cards. Leave a note as to how the person can access the bank account and the credit card info online. Also state where the physical credit cards are located.
    • Investment account information: You should provide a list of any active accounts, as well as account numbers and contact information for your financial advisor.
    • Benefits information: This will include information related to your employer, any benefits they offer, and their contact information. Don't forget a copy of your pension plan since there may be spousal beneficiary provisions. If you’re already collecting retirement benefits, including Social Security, include any recent information, including award letters and/or recent 1099s for tax purposes.
    • Income tax returns: Since physical copies can be bulky, you can either store them on a flash drive and place the drive in a pocket of the binder, or scan them into your computer and then leave information in the binder about where the returns are and how to access them.
    • Information regarding your home: This includes deeds, mortgage documents, and account numbers for companies providing electricity, gas, cable, water, sewer, trash, and HOA association dues (if applicable). If you use a lawn care or snow removal service, contact information should also be provided, as well as the basic fee structure and agreed-upon service levels.
    • Usernames and passwords: Take a moment to list out all of your devices and internet sites where you store important information. Check your browser to make sure you've included everything. Then list out the passwords to each of those sites.
    • List of personal effects and instructions: The instructions will include where or to whom you want your possessions and valuables to be distributed.

    Related: Disability Insurance: The Most Important Insurance People Don't Buy

    Where Should You Keep Your Legacy Binder

    This is a bit of a balancing act. The binder obviously includes a lot of personal information and can cause you some real damage if it falls into the wrong hands, especially when you're still alive. Please store it in a safe place. That might be a safe in your home, a safety deposit box at your bank, or someplace else that you feel safe leaving it.

    At the same time, the binder should be readily available if it’s needed on short notice. We suggest only telling two people that you trust where the binder is located. The reason for having more than one person know the whereabouts is just in case the trusted person is not available, there will be a backup.

    It's also worth a few minutes of your time to go through the binder with those people. Explain things that might be unclear.  Answer any questions that person might have. I remember doing this with my parents when they left for an extended vacation while I was in college. Thankfully they returned home safely, but it was really helpful to know where everything was just in case.

    Other things to consider about where to store your legacy binder include the following.

    • Have a backup legacy binder in a remote location — That would ensure that an alternate copy is available in the event your home is destroyed in a fire, flood or earthquake.
    • Keys and/or combinations to locks should be distributed — This applies if your legacy binder is kept under lock and key. Again, you need to be careful about who gets these. The keys or combinations should only be given to the same people with whom you have trusted the information in your binder.
    • Do not just put everything on a computer — While it may be possible, and even easier, to store this information on a computer, it can also be a major security risk. The loss of your computer, or the information it contains, could create an identity theft nightmare. Additionally, if the computer malfunctions or you change a password but don't tell the people in charge after you die, they might not even be able to access it.

    A New Take On The Legacy Binder: The ICE Binder

    The legacy binder that we recommend at Choose FI is the In Case of Emergency (ICE) Binder. Created by Chelsea from Smart Money Mamas, this legacy binder makes your planning simple. It's all laid out for you. All you need to do is fill everything out. It includes worksheets, instructions, and PDF pages you can type right into – no handwriting needed!

    To give you a better sense of everything the ICE Binder has to offer, let’s dig into the details.

    Listen: The Family Emergency Binder 

    Features

    The ICE Binder includes:

    • Over 90 pages of simple, printable worksheets that help you organize everything your family may need to know.
    • 15 sub-sections that are easy to navigate.
    • A mix of pages that include official, need-to-know information and more sentimental questions about your family and friends.

    Get your ICE Binder here. Use the coupon code CHOOSEFI for 20% off.

    Sample Pages

    Here's a sneak peek of some of the pages in the ICE Binder to give you a better sense of what's in it, and how it can help you.

    The ICE Binder includes family, personal, and nearly every financial topic you can think of.

    As you can see, it may take a while to fill out all these pages, but starting this from scratch would be more daunting. The ICE Binder offers easy-to-read pages that can keep all of your information organized. It ensures that you won't forget any important information.

    Cost

    You can get a copy of the ICE Binder for $39. Use the coupon code CHOOSEFI for 20% off.

    While that’s more expensive than creating your own binder, it will also save you a huge amount of time. Without the ICE Binder, you would have to think of everything on your own and try to remember what's important to include. That's time you could be working on a side hustle, having fun with your family, or doing one of your hobbies. Plus, you will have the peace of mind that you've thought of everything.

    Emotional Sections

    The ICE Binder obviously includes important financial information, but it leaves room for your personal thoughts as well.

    As Vicki Cook of Women Who Money and Make Smarter Decisions says:

    Chelsea has included pages about emotional topics that you really need to consider. You can't turn back the clock and tell people things that you always wanted to. Take action today to make sure you have no regrets.

    That's what the ICE Binder is all about–making sure your loved ones have access to your life. Not just your belongings, but to important memories they shared with you as well.

    Who The Binder Is For

    Everyone should have a legacy binder. It just makes good sense. But those with significant financial assets and/or a family that depends on them are two groups of people who really need one. 

    Should You Use The ICE Binder?

    Why wouldn’t you? If you want a way for your family to be able to organize all your assets without a hassle in case the worst happens, the ICE Binder is perfect. It gives you and your loved ones peace of mind. And in the end, that's the most important legacy you can leave.

    Get started on your ICE Binder here. Use the coupon code CHOOSEFI for 20% off.

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    Why You Need A Legacy Binder

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    Choose FI has partnered with CardRatings for our coverage of credit card products. Choose FI and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. Disclosures.

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