The Single Most Important — And Unconventional — Estate Planning Tip You Will Ever Get

Today I’m going to share an unconventional estate planning tip. I say “unconventional” because this is not the sort of advice you’ll get in a book or from a financial planner. But this might be the most important advice you will ever get, and it is something I have put into practice myself: I recently updated my estate plan with an attorney I trust here in Dallas.

Estate planning is less about having the proper paperwork in place and more about managing the people in your life…many of whom may be uncomfortable talking about death. They may also be far less organized or financially savvy than you. The fact is, you can do all the “correct” paperwork and have an airtight will and testament in place, but it won’t matter if your spouse or heirs can’t remember where it is or what to do with it.

On this count, I learned a critical lesson from my grandfather. Though a gentle soul, he was a Southerner…and had the lack of patience for which we Southerners are known. As a child, I watched him pull his hair out trying to explain to my grandmother and mother what they should do if he were to die unexpectedly.

He may as well have been explaining quantum physics, because every time he would start going through the documents their eyes would glaze over and he would end up throwing up his hands in despair.

There are some people that are overwhelmed by personal finances. Sure, they can balance a checkbook and live responsibly, but managing an estate is something that they’re just simply not programmed to do. My grandfather reached this conclusion, and took matters into his own hands by arranging his estate with an attorney and the trust department at his bank. And when his time came, the financial transition for my grandmother was simple. The attorney had precise instructions, my grandmother’s bills continued to get paid, and there was really nothing left to sort out.

Thirty years later, I found myself having the same conversation in my own house. For years, I tried to explain to my poor wife what she should do in the event I unexpectedly dropped dead of a heart attack…where all of our IRA accounts, life insurance policies and other assets are housed…and every time I accomplished nothing more than making her feel more insecure and uncomfortable about what would happen to her if I were gone.

So I did what my grandfather did. I took the details of my entire financial life—everything from my business checking accounts to the kids’ college funds—and gave copies to my estate attorney. I then gave my wife, mother and mother-in-law her business card and said, “If I die, call her. She knows where everything is.”

And I mean everything. In addition to a copy of my will, she also has copies of my IRA beneficiary forms, my life insurance policies, the locations of all of my bank accounts, my LLC operating agreements, and probably even my second-grade report card.

Is this “good” estate planning?

Going by the book, probably not. But again, estate planning is as much about dealing with people as it is dealing with paperwork. And in my experience, most couples have one spouse that has the finances under control. In my family, it has been the husband, but in my experiences with clients it is just as often the wife. But it’s rare to find a couple in which both partners are equally engaged.

If you are the spouse that handles the finances, take my advice seriously. Don’t frustrate yourself and cause your spouse unneeded stress. Do both of you a favor by finding a professional you trust and instructing them to guide your surviving spouse through the process once you’re gone. Keep your spouse involved in the major decision making, of course, and include them in the conversations with the estate planner. If nothing else, you need them to be comfortable and familiar with the estate planner so that they trust them when the time comes.

Also, be smart about it. You shouldn’t hand out your account passwords or give full power of attorney because, even if you trust your estate planner, you may not know and trust everyone that has access to their office.

And remember to have several of their business cards around the house somewhere they can’t get lost. None of this advice will do your widow or widower any good if they can’t remember who to call!