You might know where all your important financial information is kept but does anyone else? Would someone be able to deal with your affairs easily if you die or are incapable of doing so yourself? If the answer is no, take the time to create a financial file.
Four important reasons to create a financial file
1. Easy access to important information
A single file that holds all of your important personal documents in one place allows easy access to your financial information for your loved ones or the executor of your will in the event that you become unable to manage your own affairs, or you pass away. It should not just list the assets you have but include other information such as where your will is kept, your wishes with regard to funeral arrangements etc.
2. To avoid assets getting ‘lost’
Our financial lives are increasingly complicated and it is easy for elements of an estate to get lost. There are billions of dollars’ worth of bank accounts, insurance policies and other forgotten holdings out there. Keeping a file – digital and/or physical – ensures that none of yours will get overlooked.
3. To ease stress for your loved ones
Dealing with incapacitating illness and death is stressful enough, without having to piece together a disparate jigsaw of financial information and wondering if you are complying with someone’s wishes.
4. To give your loved ones speedy access to funds
Administrative chaos could result in funds being blocked for your loved ones while a lengthy probate process ensures. Life insurance falls outside of an estate and can be accessed fast upon your death but that’s no use if no one knows it exists!
5. To avoid unnecessary legal fees
We all know that lawyers don’t come cheap. Awell-organisedd financial file cuts down on unnecessary legal fees to deal with your estate.
Your financial file: digital versus physical?
To cross all the t’s and dot all the i’s we would recommend keeping a physical and a digital file. It’s always good to have scanned copies of documents in case you fall victim to fire or theft.
Digital files should, of course, be password protected to ensure information doesn’t fall into the wrong hands. You need to choose a trusted individual and grant them access to your financial file. It goes without saying that you should choose carefully as you are entrusting your most precious information to them.
What to include in your financial file
This is a basic list of the information and documentation to include in your financial file:
- Your details
- Key contacts
- Information regarding your will or wills
- Powers of attorney
- Bank accounts
- Credit cards
- Loans
- Details of all assets: stocks, shares, bank accounts, savings etc
- Pension
- Property assets
- Gifts made during your lifetime and beneficiary information
- Digital data and online accounts e.g. social media
It looks like a lot of information to gather but don’t panic! We’ve made life easy for you by creating a handy, editable document to fill in and keep everything in one place. Download it here and get this important job ticked off in no time.
You’re welcome!
Don’t forget to update your financial file!
It’s a good idea to have an annual check of your financial file to see if anything needs updating. It should be a relatively painless process once all your information is organised in one place.
If logging your financial affairs raises any questions about pensions, life insurance, estate planning or inheritance tax, we have a team of professionals who have the answers.
Feel free to contact us to be put in touch with one of your highly experienced financial advisers to discuss your financial planning concerns.
A leading provider of expat financial services and wealth management services across Asia.
