Why Everyone Needs a “Life File”

Friend-of-the-blog Mary and I had a wonderful conversation this week about an important – but depressing – topic:

Everyone should get their sh** together in case they get hit by a bus.

Seriously. It might not be a bus. But you never know when death will come knocking.

The last thing you want – other than getting hit by that bus – is to leave your loved ones with a mess after you go. Such a mess can take many forms. Financial. Logistical. Legal.

But it can all be avoided with a “Life File.” Some call it a “death binder.” Or perhaps a “get my sh** together list.” Whatever you call it, today’s topic is a cohesive packet of information for a loved one to access if/when you die. To add some semantic cheer to this dreary topic, we’ll refer to it as a Life File throughout this article. Yay! Life!

Let’s get to it. What info do you need to include in your Life File?

Estate Planning Documents

The first aspect of your Life File should discuss where your Will, Power of Attorney, and Healthcare Proxy (aka Living Will) are located. For more info, here’s an Estate Planning 101 briefing.

The Will matters if you die.

The POA and Healthcare Proxy matter if you become debilitated.

Your Life File should account for both scenarios. Odds are, whether you’re fully dead or “only” permanently disabled, someone in your life will need to know the information in your Life File.

Important Physical Items

Your Life File should describe the location of important physical items in your life. Examples include:

• The deed to your house
• The title on your car
• Backup keys – to your house, your car, etc.
• Your Social Security card and birth certificate
• Insurance cards
• That 1952 Mickey Mantle rookie card
• Marriage certificate
• Military records
• Safe deposit box(es)
• Driver’s license
• Passport
• Citizenship papers
• Your stash of illegal Cuban cigars
• Adoption papers
• Tax returns
• And the estate planning documents mentioned above

Passwords

Your Life File should discuss your online passwords. This is a big one, and getting bigger by the day.

The easiest method – by far – is to use a password manager (e.g. LastPass), and then share the password manager details in your Life File. It’s like having a “master key.”

If you don’t use a password manager, your next best option is to create a spreadsheet of usernames and passwords to include in the Life File. This can be challenging to create and update – could you rattle off all the accounts you have on the Internet?

The most vital usernames and passwords to include are:

• Bank accounts
• Investment accounts
• Credit card accounts
• Any/all bills you pay online
• Your computer password
• Your primary email account(s)
• Social media account(s)
• And any other important web accounts specific to you

Finances

Your Life File should include significant financial details. You should describe the following details for all your accounts (far below)…

• Dollar amounts
• Custodian/Location (e.g. Ally Bank, Schwab, etc)
• Purpose/description (if applicable)
• Online username and password
• Contact name/info (if applicable)
• Beneficiaries and/or inheritors

…For each of the following accounts:

• Bank accounts
• Investment accounts
• Retirement accounts
• Pensions
• Life insurance policies
• Disability insurance policies
• Miscellaneous accounts, such as 529s, HSAs, UGMAs, etc.
• Mortgages and any other loans

You should also include real property, like real estate or a house, and business ownership. If you already have a Net Worth Statement for you/your household, you’ve done two-thirds of the work here.

The Finances section of your Life File should also list the bills you pay and how you pay them. Every single one.

It’s boring. And tedious. But it won’t be as painful as the burden you place on your spouse if they’re simultaneously mourning your loss and negotiating with an AI chatbot to not turn off your utilities due to missed payments.

If you already track your spending with a budget, you’ve done two-thirds of the work here.

Bonus points: you can likely call the companies you pay bills to and add your partner/loved one as a joint owner, secondary contact, etc. This might make the post-death changes significantly easier.

People & Plans

Your Life File might include specific loved ones, colleagues, trusted advisors, etc. who should be notified if you die or become disabled.

You might want to describe specific plans in your Life File, too. Especially plans like “Call this specific person because of that specific reason.” The reasons can be infinite, but the people frequently include:

• Attorneys
• Accountants
• Financial advisors
• Insurance agents/providers
• Business partners/colleagues
• Real estate agents
• Guardians
• Funeral directors

The question to ask yourself (over, and over, and over…) is, “If I died, would [this aspect of my life] transition smoothly for my loved ones?” 

If the answer is no, you should add People or Plans to your Life File the help smooth that transition.

Bonus points: make sure these People are aware they’ll get a call if you die. It’s not a bad idea to give them the heads-up.

Funeral and Death Logistics

If you wish, your Life File can include:

• Some/all of your obituary, if you choose to write it
• Your preference for burial, cremation, getting launched in a rocket, etc.
• Your preferred plan for a funeral/ceremony.
• Messages for your loved ones.

Where to Store Your Life File

A Life File is only as good as its ability to end up in your loved ones’ hands. Therefore, you should:

• Keep a digital master copy of your Life File that you’ll revisit over time. Keep it secret and safe. Encrypt it and/or password-protect it.
• Make a digital copy (or copies) onto a USB thumb drive. Give a copy to the final recipient (e.g. your spouse) and at least one other trusted contact. I would include details of this exchange in the Life File itself! Hey all – just so you know, my wife, my attorney, and my sister have a copy of this USB drive.
• But also, I would print out a physical copy just in case and place it in a safe or deposit box.

When To Create a Life File

You should create your Life File ASAP. But let’s be honest: life gets in the way. Ironic, no? My recommendation: make your Life File a top priority on the next…

• Rainy weekend morning (so rainy even the dog won’t go outside)
• Extra holiday time (like the random time between Christmas and New Years)
• Then revisit and revise the Life File at least once per year.

Other Ideas:

• Communicate your end-of-life wishes with people you love and/or trust. Friendly reminder: you can only communicate while alive and conscious. Do it while you can!
• Most adults should have a Life File. You. Your spouse. Your siblings, parents, friends. Share this idea with them.
• If someone else is mentioned in your Life File, consider telling them. Especially if you’re asking for their help and cooperation after you die.
• Here are some additional resources:
  • Get Your Shit Together – a website created by Chenel Reynolds after she lost her husband, helping others prevent the same confusion she felt.
  • Erik Dewey’s “Big Book” template – a ~50-page fillable PDF to create your own Life File

Did I miss anything major? Let me know! I know it’s a dreary topic, but we all have responsibilites. “Plant a tree” for your loved ones. They’ll thank you for it!

Thank you for reading! If you enjoyed this article, join 8500+ subscribers who read my 2-minute weekly email, where I send you links to the smartest financial content I find online every week. You can read past newsletters before signing up.

-Jesse

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