Beyond Term Life Insurance: The Importance of a Legacy Binder

If I leave here tomorrow, would you still remember me? For I must be traveling on now…

My guess is yes, you will remember me, at least for a little while, but will you remember how I manage our money? Will you still remember why we do the backdoor Roth in January and know how best to take distributions from my 457(b)? How to accesss our joint taxable account or how the bills get paid every month?

Will you know where I want my body or ashes to be buried or spread? Or what I loved and will miss most about you?

You can take care of your family’s financial needs with a life insurance policy (get a term life insurance quote online from PolicyGenius or from one of our trusted agents), but there will be a hundred other questions and conundrums if you were to pass away suddenly and unexpectedly.

Our friend Ether to FIRE shared his love letter from a dead man in a recent post. Today, I’d like to share a resource that expands upon that idea and makes it easy to gather all the necessary information to share with your next of kin in the event of an untimely demise.

 

Beyond Term Life Insurance: The Importance of a Legacy Binder

 

What is a legacy binder? It’s a place where you store all the pertinent information that can help your family pick up the pieces if you, your partner, or both of you leave this world unexpectedly. It can also come in handy if you are incapacitated and unable to function as you did before.

The resource I’m highlighting today is actually best prepared as two binders. The first contains basic family information that does not contain sensitive information that you could store on a bookshelf. This includes information such as:

  • Emergency Phone Numbers
  • Extended Family Contact Info
  • Medical Information (doctors, insurance, POA)
  • Child care preferences
  • Pet care
  • Insurance Policies
  • Property Information
  • Tax Information

 

The second binder is one that should be under lock and key, preferably in a safe. It may be a good idea to also share a copy with the person you most trust to help your family in your absence, or at least give them a labeled key to the safe.

This second binder includes sensitive information that would make an identity thief drool. Keep that in mind when deciding where to keep it and who will have access. It will include information such as:set for life

  • Investment accounts and passwords
  • Investing strategy (preferably an Investor Policy Statement)
  • Social Media accounts and passwords
  • Email accounts and passwords
  • Copies of Personal Documents (Social Security, Birth Certificate, Marriage License)
  • Notes to your loved ones

 

There’s a lot of information to gather, but if it’s not easy for you to do while alive and well, imagine if your partner or child had to piece together as much as possible while grieving your loss or keeping vigil near your ICU bed. I don’t like to think about it any more than you do, but I don’t want to leave anyone in the lurch if the worst happens.

 

I Don’t Have a Legacy Binder… Yet

 

I’ll be honest with you. I’ve known I should have something like this ever since I read a blog post about the concept several years ago. Estate planning is not my strong suit, and a legacy binder seems to be an often-ignored aspect of it — not just for me but for many.

I was reminded that this was a task I ought to complete when I published that post from E.T.F. a few months ago.

And yet, I’ve done nothing. But that’s going to change soon.

 

In Case of Emergency Binder: What Your Loved Ones Need to Know

 

I have a problem with inertia. When I need to get things done, I start with the easiest tasks to accomplish. It’s easier to get a small ball rolling than a big boulder. To me, this binder idea has been a massive, oblong rock that I haven’t wanted to touch. I always reach for the pebbles and bypass the heavy stones.

Luckily for me (and for you if you haven’t done this), our friend Chelsea Brennan at Mama Fish Saves has taken the big oddly-shaped rock and turned it into something resembling a bowling ball. It’s still a bit heavy, but I can easily pick it up and roll it down the lane.

She has prepared an attractive 92-page downloadable that contains all the information you’ll need to prepare and complete your legacy binder.

 

 

I have looked it over from top to bottom and will begin to fill our copy out from top to bottom. Having a well-organized print out makes it much easier to tackle this task, and you can easily do it a few pages at a time.

The “ICE Binder” has all of the information I mentioned above and additional pages for those with military service, private businesses, and plenty of blank note space for additional information not covered in the template.

bankofamericaWhat’s not included? There isn’t much mention of wills and trusts, other than to insert your will and trust information. It’s important to distinguish that the ICE Binder is not meant to replace those. I didn’t see any mention of 529 Plans, but there’s plenty of space to add information for every type of account one can own.

Is 92 pages enough? When complete, your binder(s) will be significantly thicker than 92 pages. Chelsea recommends printing the downloadable in color, placing the sheets in protective sleeves, and inserting all the documents and requested information that can’t be written in the pages in additional sleeves.

 

Where Can I Get My ICE Binder?

 

You can come up with your own easily enough, but I doubt it will be as complete as the one Chelsea put together. If you value your time at above minimum wage, I highly recommend coughing up the $29 to download hers.

Chelsea is a generous person, but she’s no longer a hedge fund manager, having chosen to remain home with her husband and children while growing a freelance and entrepreneurial career. She does hope to receive some compensation for her efforts, and I think she deserves some. Full disclosure: I do have an affiliate relationship with the product and your purchase via my affiliate link will enhance this site’s charitable mission.

 

 

The $29 cost is a great value, and based on the overwhelmingly positive feedback Mrs. Brennan and I have received, I would not be surprised to see the cost increase in the future.

For additional information on legacy binders, see posts from our friends at:

 


Track your investments for free with Personal Capital. That's how I track the PoF portfolio.  

 

Do you have a legacy binder? Do you use something similar or different? What’s in yours that you recommend others add to their own?

 

 

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22 comments

  • Such a great resource, Mama Fish Saves! This is essential to a family’s success and is necessary for everyone. When we met with our attorney to make our will and plan our estate we received a binder, but that cost meeting (including the binder) cost us thousands. Yours is a steal at <$30. Great idea!

    Highly recommended for anyone with a spouse and/or kids.

    TPP

    • Why spend thousands of dollars when you can spend dozens?

      I’m sure you got much more than a binder out of the meeting, but I think it’s great to DIY as much as you can without getting in over your head. This resource makes it easy to check off one of those boxes.

      Cheers!
      -PoF

      • Completely agree! The reason to spend thousands? I didn’t know better or have access to this at the time 🙂

        We also got all of our legal ducks in a row in case my wife and I die in a fiery car accident or something. That was the other part. Wanted to make sure the kids are taken care of and not lost in probate court.

        TPP

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  • Liz from chief mom officer had a wonderful post yesterday which also highlighted the need for something like this when her husband was in a coma and she realized that she was unprepared to handle the items he typically took care of.

    Have to say that this is a homerun idea to create something like this and think it will help us break free of the inertia holding us back from creating one of our own.

    • Most people don’t realize how important it really is to have these documents and information organized until it’s too late. Best to have it and never have to use it (at least not for a very long time) than to need it and not have it.

      Cheers!
      -PoF

  • Jacq

    A few years ago my dad showed me his binder around Thanksgiving, and surprised all of us with a medical emergency just after Christmas. I was relieved to know in building their binder, he and my step mom had discussed this stuff. He had some memory issues (and has since recovered), but that power of attorney and or finances is so important! Because she is his spouse my step mom had normal access to accounts, but if they were both unable to do so at the time, documents in the binder have things covered.
    I know these binders are something people finally think they should do when they get married, or have their first kid (or 3rd in J $’s case from his post last week). I think they are even more important for people who are single! If you haven’t had an in depth conversation with a long term significant other, who might know your wishes? How is your relationship with your parents, as that is likely the default? If they aren’t around, how about your siblings? Do you want any the above making decisions for you if you can’t? And as awful as it sounds, if a meteor hit the house at Christmas and took out all of my family memebers, who would I want to get my ‘stuff’? Friends? Charities? A cousin (I have 9 cousins…)?
    The morbidity of thinking about death or being incapacitated is not pleasant. But think about it once, and you are giving a gift to your loved ones to not need to think (or squabble) about it later. Have a / the conversations now with your potential executor / POA and any back ups, and avoid surprises later. A few years ago I was starting to look into a will, and my sister said no way did she want to be the decision maker after my parents. After dad’s thing, she said she didn’t want anyone else, that she’s my sister, it should be her. A friend unexpectedly spent the weekend driving to NC & back as he is/was the closest ‘by blood’ relative, and will likely have lots more paperwork to deal with now as there was no will or legacy binder.
    With Chelsea’s amazing resource…there’s no excuse to put it off!

  • Tatiana

    Thank you SO much! I just started working on it yesterday, trying to create my version. But the download is going to make it so much easier.

    • The timing is impeccable!

      I do think this is something that could be done independently without the template, but I doubt it would be as well organized or complete. For the price of a paperback book, I recommend the download to save yourself a bunch of time.

      Cheers!
      -PoF

  • This is a great tool.

    I see so many estate plans that don’t include digital assets. It’s incredibly important these days to include. If you’re using a password manager (LastPass, Dashlane, etc.) be sure to include the master password to that as well.

    Well done, Chelsea!

  • GasFIRE

    A couple years ago before I found sites like this and WCI I engaged the services of a fee-only financial planner as a check-up and to make sure I didn’t have too much tunnel vision. Beyond the financial analysis he also advised an ICE binder and provided the template. That suggestion was perhaps the most important one of all and I was surprised it came from him and not my estate attorney. Most people including myself don’t want to deal with these logistical death issues. It’s good to get a gentle nudge to take care of this important task not just for yourself but to help those you leave behind.

    • Sandy Matuschak

      Our estate planning attorney never mentioned anything like this either and definitely think they should. Now that I’m reading about think I’ll mention this to him!

  • Everyone needs this tool! Years ago a very wise client shared his with me. It was last winter’s project to get it completed and up to date for my family. I also used it to do a rough plan for my mother’s estate since I am now the executor. She is not a detail person, so it will be a work in progress. $29 is a great a great price, but at $19 you have no excuse not to put this tool to work for you.

  • Dan Lake

    Edit: NVM

  • Another vote for putting this information into one’s password manager. Store the encrypted file on Dropbox and keep the password in your safe/vault. I actually split my master password in half and gave the halves to two trusted family members – they’d have to work together to get in if my wife and I both go out in a blaze of glory together.

    • Sandy Matuschak

      What password manager do you use and is it pretty straightforward in re: to ‘saving an encrypted copy to Dropbox’?

      • I use 1Password – it’s linked in my comment. It’s trivial to store the data file in Dropbox, and the program will walk you through it. That way, when I make a change or add a password, they are updated on my wife’s phone automagically. Other managers do similar, like LastPass.

        I will say, in 2018, everyone should be using one. The days of using m0mof3Gr8tkidz won’t cut it anymore.

        I wrote more about it here: https://thelawnforum.com/viewtopic.php?t=3937

  • Taylor

    Excellent ideas. I’ve seen a couple mentions about password managers. My wife and I currently use LastPass specifically because it has an Emergency Access feature (backdoor) to allow our trusted family members access to our accounts. Let’s say we died in a plane crash…they could request access to our accounts and after a certain length of time that we specify (we set the timer for 3 days), they would be granted access if we didn’t deny their request. Incredibly simple idea that allows us to share our most sensitive information with our loved ones, maintain our privacy during normal times, and always have everything up to date instead of having to update passwords on a printout or in a binder.

  • Harjot

    This is a great list, and is a steal at that price. To do – today.

  • dimensionlessindex

    Is it absolutely necessary to include passwords even if spouse/children are listed as beneficiaries on the accounts?

    • I supposed it depends on the company / brokerage, but my answer would still be Yes. The ownership will transfer to the beneficiary, but the beneficiary needs to have a way to access the accounts. It may be that the beneficiary is set up with a new account using a new username and password, but I think in the interim, the ability to log in to the account could be important.

      Best,
      -PoF

  • Hank

    The fillable pdf is not usable so if you want an electronic document this is not it. I still have to enter everything by hand because there isn’t enough room on the document for my investment accounts or for my spouses social media accounts. If I try to duplicate a page it is no longer independently fillable. I’d discourage anybody from buying this until it gets fixed

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