Why You Should Share Your Financial Information

Going paperless offers convenience and flexibility when it comes to managing bills and financial statements.  I remember the days of getting my monthly 10+ page bank statement in the mail and using it to balance my checkbook. At one time, before computers and scanners, the bank would actually send your canceled checks back to you to where you stored them and referenced them for your income tax preparation. I had a file cabinet for managing all of these paper statements that came through “snail mail” which used to include credit card bills, utility, mortgage, property tax etc.  There used to be quite the paper trail. Today, going online eliminates the paper and more importantly allows one the option to monitor things in real-time.  Here’s the downside: There no longer is a paper trail. Everything is online and secured with usernames and passwords. For me, my old paper trail is now in the cloud carefully distributed over 20+ different websites.
OK, are you ready for this? I’m the only one who knows what the accounts and the websites are AND all the log-in information to access these accounts. OMG!
Now, think about this for a moment. If something were to happen to you, how could your family access the bills and financial information quickly? How would they start putting your “affairs in order” if there is no paper trail?  How will they know where all the assets and liabilities are “hidden”?
Besides referring to past tax returns where all the income and deduction accounts would be listed, they still wouldn’t know the details of the account information.  Would anyone even think of this resource as a starting point during the family crisis? Probably not right away.  I also need to mention that the tax returns are now electronic and somewhere off-line on a USB drive in a drawer or your computer.

Is anyone reading this squirming in their seats yet?  Allow me to add some extra discomfort.  If your “depression era or baby boomer” parents or in-laws are still around, do you know where to begin to find the critical things that you will need to put their affairs in order when the time comes?   You’ll have some help because they saved everything, AND I mean everything, in a couple of file cabinets, and desk drawers. Like 40+ years worth.   You think that’s not so bad?  How do you know which accounts are still active, and which accounts are long closed? You will have to sift through and organize these to settle the estate.  I can assure that you if have not experienced this yourself already, it is a time-consuming process. You’ll you wonder how your parents could keep all of these outdated files that may or may not be of value to you as you settle the estate over time.

In many of my earlier blogs, I write about taking action.  The consequence of not taking action falls mostly on yourself.  In today’s topic, the consequence of not taking action falls exclusively on others.  (The word consequence gets a bad rap because we usually use it in the negative term referring to punishment. Consequences have a double edge sword as consequences can be good too.)

Here’s some guidance on how to start the process of creating an Asset Map.  Another blog writer referred to it as a Legacy Binder. This binder is designed to put all of your important documents in one organized file. It’s kept in a secure place and most importantly, allow authorized family members to access the information when the time comes that it is needed. Let’s first touch on what’s important. If I missed anything, speak up in the comments section of this blog so we can track it. Let’s begin using categories and then itemize it.
1. Bills
a. Credit Cards (Bank, Department Store, Gas Station)
b. Utility (Gas, Electric, Landline, Cable, Satellite, Internet, trash pickup, landscapers, etc.)
c. Mortgage/Property Tax/Rent
d. Insurance (home/renters, auto, boat, motorcycle, umbrella, etc.)
e. Car Payments
f. Subscriptions, Online & Paper
2. Financial
a. Bank (Checking, Savings, Money Markets, CDs)
b. Brokerage (Stock and bonds: Schwab, Chase, Fidelity, Capital One, etc.)
c. IRA (Roth and Traditional, SEP)
d. 401k (Current and past employment 401ks if you did not roll them)
e. Pension Info (yes, they still exist for some).
f. Social Security info
3. Personal Property
a. Safe Deposit box
b. Coins, precious metals
c. Wills, Power of Attorney and Trusts
d. Car Titles
e. Collectibles
f. Property deeds, birth certs, death certs, social security cards, passports

That should just about cover all the major ones.  Notice that I put “Bills” first as they are going to be the most urgent as the creditors are going to want their money and very happy to charge interest for missed payments.
Let’s take a look at this list and ask yourself how many websites, usernames & passwords are you taking care of yourself?  Now imagine if you were incapacitated or no longer around, how could anyone manage this without the background or knowledge of their existence?
If you have a significant other, this might be a little easier. For me, I pay most of my bills online with the banking function.  All of the accounts are listed, along with their truncated account numbers. My significant other has joint ownership and has access to these accounts. She can figure out pretty easily when the bill is due.  Easy, just need to refresh our previous conversations.

Here’s a system I use that works for me.  It’s a combination of a paper trail and electronic.  My Asset Map lists all the (2.) Financial accounts and account numbers and current balances.  I keep this on an excel spreadsheet, which also happens to be part of my manual Net Worth tracking template.  I have a cell that states “last updated” so I know how fresh the information is.  I save this excel file on a USB drive, never on any computer.  At one time I password protected it, but since I learned how to crack these passwords with a utility available to anyone, I don’t bother anymore. I take this same excel sheet (v2) and delete all the account numbers and save it under a different name and print it.  The only sensitive information on this one is the Institution and balances.
On another sheet, I list all the (1.) Bills that need to be paid and how they are paid. I save this on the USB as well along with a printout.  I then log into each account and print the first two pages of the statements of each account.  The information is sensitive and needs to be secured and protected from water, fire and theft.  I purchased a Sentry Safe years ago to keep important papers.  I place the edited excel asset map and few other docs, like car titles and instructions to the family in this fire safe. For the USB drive, printed financial statements, and (3). Personal Property, these go into a safe deposit box at the bank. The bank will help you set up access rights to family members.
The most important part of this process is that you must tell your family that these docs exist and tell them where to find them.  Once a year, I update the USB and add/remove any account information. I also make the necessary adjustments to the paper docs on file.

This method addresses the existence and location of the accounts, bills and personal property.  It does not address access to most of the online accounts that have usernames and passwords.  For me, I systematically change usernames and passwords so any login information I store in the Bank Safety Deposit box will be quickly outdated.  I don’t yet have a practical and secure method to communicate the ever-changing usernames and passwords to my significant other.  I have a couple of ideas, but none tested yet.

If your parents or in-laws are still around, you might want to start having the legacy binder conversations. For the Millennials and the Gen-X group, many of you are still single, so your best connection is with your parents.  Start the discussion and develop your system and tell them about it.  Maybe you can even teach the old dogs new tricks with some of the modern tools like Personal Capital or Mint.com. These might be some tools worth investigating in the near future.

Did this blog article strike a nerve?  Does it provide enough motivation to create an action plan?  I’m looking for suggestions to securely handle the username/password issue and would appreciate comments in this blog.

Let’s get to it.

Author: Francis

Started out in science and somehow ended up in sales & marketing. Grew into a results oriented sales professional with extensive experience selling and positioning scientific solutions in the pharma/biotech, life sciences and medical diagnostics markets. In 1998 I created an excel sheet to track spending and cash flow to learn personal finance on my own. They don't teach this in school and by the time one figures it out, most of let all these resources slip through our fingers. It's time to pay it forward to this next gen so that they can shave 15-20 years off for working for "the man" with insights, a library of tools, and motivation from me and plenty of other FI bloggers that I follow.

One thought on “Why You Should Share Your Financial Information”

  1. I never put much thought into this, but I can see how putting small incremental efforts into something- the outcome is much easier for everyone. Thanks for the insight!

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