No, it’s not a drawer that contains the many legacies of ancient philosophers, mathematicians, or pioneers of the world. It’s a drawer that contains the hard copies of your most important documents, and houses all the vital information that your family will need to access in the case of your death. Maybe you’ve kept a digital copy of these locked away on your computer; that will not help your loved ones in the event that you’re unable to provide them access. The term “legacy drawer” was popularized by personal finance personality Dave Ramsey. A legacy drawer should be locked up with a key, and a copy of that key should be given to someone you trust. The purpose of the legacy drawer is to allow someone to bypass the confusion and sleuthing that is required to gather your end-of-life wishes. Keeping your will and other estate planning documents centralized make your beneficiaries’ lives easier. An inheritor likely knows that these documents and papers may be substantial, requiring a very large drawer. 😉
Ideally, the legacy drawer lives in your home. It should contain all the documents (see the list below) that your spouse, your heirs, or trusted contact will need if you’re no longer around. It would be wise to create copies of these documents and place them in a secure vault or safe deposit box as well, that your executor or personal representative can access.
So, what should live inside your legacy drawer?
- A cover letter. This letter lays out the content of the legacy drawer and what purpose these documents will serve in the settling of your life and finances.
- A will and other estate planning documents. An estate plan is crucial in honoring the bequest of assets to your heirs and settling any estate taxes.
- Your financial account information and/or life insurance policies. Listing your account names and numbers to make it easy for these accounts to be tracked down. The amounts listed in these accounts would be helpful.
- Any funeral instructions. These details should be specific and concise. If it’s important that your loved ones fulfill your wishes, then it helps to spell everything out for them.
- Your tax returns and account statements. Surprisingly, you can be audited after your death. This unlikely scenario means that it would be helpful to leave behind your past tax returns along with monthly budgets to help in the event this occurs. Your financial advisors can assist with getting this information.
- A list of people to notify. Who should be invited to your funeral or celebration of life? A specific list of people who should know that you have passed away will help your successors.
- Finally, any legacy letters. These personal letters and/or professional acknowledgements would be a touching way to express yourself to the ones you are leaving behind. By leaving them in this drawer, you guarantee that they will reach the intended recipients.
This may seem overwhelming; that’s why you should clue your trusted contact into this plan and share the location of the legacy drawer, along with the key. Once the drawer has been set up, it’ll make it easier to add or remove as the times change. The main reason to set up a legacy drawer is bringing peace of mind to you and your inner circle. Odds are you’ve already created many of these documents.
At The Wealth Conservancy, our financial planners and wealth coaches are here to assist you in this process. Call us at 303.444.1919 to learn more.