#22 - 4 Immediate Benefits of an Estate Map
Reluctant Executor News
Finding and documenting the details that your family will need to close your estate is tedious, time consuming, and has no direct benefit to you.
Or does it?
Before talking about these benefits, you might be wondering what is an estate map?
Your estate map is a document that contains the information your family will need to deal with all of the tasks the pop up after a death. You're giving them a map with enough details about your accounts, assets, location of important documents, and much more, so that your family will know where to start, where to go, and what to do after a death. So many families struggle by not having this information.
The primary benefit of creating your estate map is for your family. Giving them a starting point will save them hours of work and stress. But there is also immediate value for yourself. These benefits are often overlooked, but spending this time can give you a leg up on other things.
Four of the immediate benefits to creating your estate map are:
Get your financial life organized
Ensure your assets go to who you intend
Locate important papers
Make difficult conversations easier
Get Your Financial Life Organized
A key part of your estate map is documenting your financial assets. Your family will need to know the impact to their cash flow after a death. Will there be enough continuing income, such as from real estate rentals, to cover their bills? Can they get rid of any bills? Is there money saved in an account that they can access? Is any in a retirement account that needs to be handled in a special way upon inheriting it? What are the tax implications for all of these accounts? Are there any real estate properties or other assets that will need to be sold or maintained? Plus, you don't want to surprise your family with unknown debt that will come out of their inheritance.
In order to make a financial plan or budget, and get your financial life organized, you first need to know what you have. The financial details included in your estate map are the same details that you need to get your current financial picture: your expected income, average monthly bills, investment accounts, retirement accounts, real estate, other assets, and debt.
After you have this clear financial picture, you can start tackling your immediate financial goals. These could include paying down debt faster, saving for a large purchase, stocking away extra for a college fund or retirement, or playing at the $100 table in Vegas instead of the $5 table.
If you already have a good handle on your financial health, then it's straightforward to copy this info over to your estate map and share with your family.
Ensure Your Assets Go To Who You Intend
An estimated 30 million 401k accounts are forgotten or left-behind when employees change jobs. In 2023 this accounted for $1.65 TRILLION, or about $55,000 per account. Not only is that account now harder for your family to find after a death (assuming they even know to look for it), but you could have put beneficiaries on that account that are no longer part of your life. Even if you have a will that states all of your assets will go to your current spouse or children, a beneficiary designation overrides your will. Therefore, if your listed beneficiary is an ex-spouse, or someone that no longer should be part of your inheritance plan, your family is out of luck. And out that money.
Keeping your beneficiaries current can also be a problem for accounts that you do know about. When you list your accounts in your estate map, you also will note the beneficiary. This is an excellent time to double check the beneficiaries on each of your accounts, and make any changes that match your current wishes.
Locate Important Papers
Estate maps can act as literal maps. You took the time to create a will, maybe a trust, and your family needs to know where those documents are located. Your estate map will guide your family to these locations. You also will include instructions to other important documents, such as any business formation papers, funeral pre-planning and receipts, insurance policies, automobile titles, etc. Your family will need these documents to complete many of the tasks that come up after a death.
The last time you sold a car, how long did it take you to find your title? What about your EIN when you had to file business tax returns? Or, were you ever curious after a storm how much your deductible was for hail damage? It's easy to lose track of documents that you only need once every few years. But when you do need them, you don't want to spend hours looking for them. By adding document locations to your estate map, you'll immediately know where to find these papers.
Make Difficult Conversations Easier
Two of the most difficult topics for families to talk about are money and death. Guess what? Those are the topics you'll need to talk about when completing your estate map. And truthfully, if you're a family that has these difficulties, the first time you bring up the topics in the estate map, the conversation will still be hard.
But, the estate map template outlines areas to cover. You can pick a topic that will be easiest to start. For example, you could ask your parents about the artwork on their walls. Where and when did they get them? Who is the artist? Is there any other artwork or memorabilia you own that isn't displayed? Then maybe throw in an anecdote about a friend who found a gold bar in their parent's attic after they died. Since nobody knew about this bar, and it wasn't in the will, the family fought over who should get it. You want to make sure you and your siblings don’t have the same experience.
From there, you can gradually move on to more direct topics, like real estate and financial accounts. And it still might not be easy. But it will get easier the second time, the third time, the fourth time, etc. You'll get valuable information each time, and may even learn something about your family that you never knew.
The Estate Map Template
The overwhelming benefit to creating your estate map is for your family. But as you just saw, there are other direct and immediate benefits to you. To get started on your estate map, download the free Reluctant Executor Estate Map Template. This spreadsheet covers the most common things your family will need, including the details that you'll need to for each.
Reluctant Executor also offers coaching sessions. These sessions are great to talk through your unique situations, and to discover things that typically slip through the cracks. You can book a coaching session by reaching out on the Reluctant Executor Coaching Page.
Or feel free to reach out to me directly at Bill@ReluctantExecutor.com.