Are we ever prepared for the worst?

Last week, Thursday September 11, 2014, marked the 13th year since the assault on the US World Trade Center by terrorists using plane-filled human targets as attack weapons.

Let us remember that day each and every year.

Let us honour once again the memories of innocent victims, including two of Bermuda’s own people, along with the many insurance finance professionals affiliated with Bermuda’s international companies. We hope we never see or experience another act so horrendous.

In the aftermath of that terrible day, after thousands of ordinary lives were upended with indescribable images, confused shock, unmitigated grief, and so many funerals, the ordinary reality of life set back in.

Consider what must have had to take place in the weeks and months afterward for all those left behind: widows, widowers, children, bereaved parents, and friends / relatives. After the terribly sad good-byes are said, some kind of living must go on. Money will needed to buy essentials: food, clothing, transportation, pay for household expenses and health care. Children will go back to school. Finances will need to be reviewed and found. Widows and widowers must cope with now being a one-income family. Insurance claims verification processes swing into gear. Employment must be resumed. Eventually, some semblance of normality and structure will return.

The general US populace could never have anticipated such enormous losses. I wondered at the time, and still do whether individuals and their families were prepared for any sort of family emergencies.

I hoped that they were — in sympathising at how simply awful it had to have been for the surviving families of 911 to pick up the pieces, hold to the memories of a happy life and carry on with the remnants left to them for the future.

Statistically, across the civilised global spectrum, professional financial planners know that 45 percent of individuals from all walks of life do not have even a basic will. That percentage has regretfully changed little for years.

Why don’t people want to plan for their loved ones, identify their legacy, and keep track of their legal, financial, emotional wishes and spiritual documents?

There is a built-in aversion estate planning: the perceived complexity, high cost, tedious task input, getting old and feeble-minded (an extremely good reason to estate plan) and of course, who wants to spend any time thinking about their own mortality.

A recent article in the New York Times, “There is More to Estate Planning Than Just a Will”, by Alina Tugend, on September 5, 2014, explored this problem with some solutions for the US market. She also spotted the “The Big Book of Everything” by Erik A Dewey, also sourced here for you.

Today, we will look at this avoided task (yes, that’s how it is perceived by many) from the Bermuda resident perspective.

Where are all your important things: financial and legal documents, physical valuables, real property assets, letter of wishes, account passwords, access addresses, smartphone and computers logistics / access, medical family history, social media account and cloud access and so on.

FINANCIAL AND LEGAL DOCUMENTS

A Bank accounts, term deposits, etc.

— Account numbers

— Passwords and login

— Statements

— Standard transfers or bill payment tracking authorization

— Standard income deposit tracking

— Amounts normally held in banks

— All signatories for each account

B. Credit / debit card

— Credit limits

— Credit card numbers and identify PINS

— Password, login to CC websites

— Master contracts

— Credit card company contact information

C. Investment accounts

— What investment manager firms

— Where custodied and with what firms

— Where: country and address

— Financial representative

— General amount invested

— Account numbers

— Average return on investment

— Copy of a recent portfolio

— Investment policy statements

— Risk tolerance

D. Retirement plans and pensions

— All of C above

— Beneficiaries

— Withdrawal / retirement date

— Annuities, if used. Terms of annuity contract, amounts paid monthly, maturity date of annuity, bank annuity deposited to, insurance company annuity provider

— Drawdown account

— Pension representative

— Government pensions

— Government contacts

E. Mortgages and lines of credit:

— Held by what bank, credit union, person, other

— Secured by what property

— Copy of mortgage document

— In what country is real estate located

— Title document and registry of deeds

— Physical address of real estate

— Other debts, eg tax bills liability and when due

F. Loans made personally to relatives and others

— Copy of the signed promissory note

G. Corporation documents

— List of shareholders

— Number of shares owned

— Articles of incorporation

— Certificate of good standing

— Minutes of corporate meetings

— Financial statements

— Bank accounts – see A. for remainder of items for bank accounts

— List of bank account signatories

— Corporate seal

— List of directors and officers

— Corporate secretary

H. Trusts

— List grantors, beneficiaries, guarantor of loans

— Loans to and from the trust, borrower, repayments, etc

— Letter of wishes

— Designated trustees and alternates

— Powers over the trust

— All assets, investments, property and related items – use lists above to list all

— Recurring distributions and to whom

— Trust deeds

— Attorney

— Trust company

I. Wills

— Executor

— Attorney

— Hard copy of will updated

— List of all assets

— Medical care directive

— Power of attorney

J. Websites

— Social media

?— Cloud storage

— E-mail accounts

— Digital wallets

— Data backup storage identification

— Passwords and login information

— Where accessed for each and every one

— Smart phones

— Internet / data service provider

— Cost

— Equipment

K. Valuables

?— Lists

?— Pictures

— Appraisals

— Insured documents

— Safe deposit box and access code authorisations

L. Health perspectives: medical history

— Family medical biases

— Medications

— Health insurance documents

M. Life insurance

— Kind

— Face values

— Cash values

— Fully paid up and / or amount of monthly payment

— Loans against cash value

— Sub-account investment statements if universal or variable life

— Insured

?— Insurer company

— Beneficiary

Don’t want a list? Need the discipline of having a checklist to work through page by page, then use the “The Big Book of Everything”, compiled by Eric Dewey. He makes it easy and convenient for you to use, on a print out page by page basis. Proficient in excel? Download the zip file to add in all the additional information you need for the Bermuda environment.

Then, distribute your book to your attorney, trusted friend or relative as well as filing in a safe place at home or at your bank.

Summary: These are only suggested topics. You know what you own, what you want for your legacy, where you would like your assets to be stored, and how your final wishes should be carried out. But, if you don’t tell anyone, well... are you leaving the vultures and possibly, the government to pick over the pieces, with the estate never going to those who deserve your remembrances?

Next: Tales (all true) of mistakes people make by not planning carefully for their future. Making a list of everything right now is a positive step. Sources:

The Big Book of Everything: http://www.erikdewey.com/bigbook.htm

New York Times: http://www.nytimes.com/2014/09/06/your-money/theres-more-to-estate-planning-than-the-will.html?_r=0

Martha Harris Myron CPA CFP JSM Masters of Law: International Tax and Financial Services, Appointed to the Professional Tax Advisory Council, American Citizens Abroad, Geneva, Switzerland. President: The Pondstraddler* Life™ Consultancy: international financial planning, publications, presentations for the challenging lifestyles of multinational individuals and their families residing, working, crossing borders, and straddling ponds in the North Atlantic Quadrangle. Specific focus for residents of Bermuda, the premier international finance centre. Contact: martha@pondstraddler.com