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Financial Inventory: Secure Your Future & Simplify Estate Planning

What happens if you or your spouse were to die or be seriously injured? Would you know how to handle the finances or know where to find all your important documents? Would you have a clear picture of all your financial accounts? Would either spouse be able to carry on managing the finances without input from the other?

For most people, the answer is a simple, “I don’t know.”

For the first few years of our marriage, my wife and I talked about our finances, but we didn’t share important logins and account information, even though we had combined our finances. I realized I needed to organize all of our logon information so either my wife or I can easily step in and take care of any financial situation as it happens – without struggling to get the information necessary to do so and trying to figure out the new budget for the new situation.

It is important for both of us to be able to access all of our accounts in the event of an emergency. If something happened to me, I would want my wife to be able to handle everything from a financial standpoint, and not have to go through lawyers or other hassles to get the account information.

Why Create a Financial Inventory?

Doing a periodic financial inventory is a great way to get a big picture view of your financial situation, as well as a detailed view of all your accounts. A financial inventory is essential in the event of the death of a loved one, catastrophic natural disaster, fire, flood, theft, etc. You want to be able to resume your financial life with as little stress as possible.

My wife and I have been refining our finances over the years we have been married. While they aren’t perfect, we have done a lot to simplify and organize our finances so we know where to find basic account information and either one of us should be able to handle the finances individually.

How to Create a Financial Inventory

Creating a financial inventory isn’t a difficult task, but it can be very time consuming. I recommend setting aside a large block of time where you can gather information, documents, and other pertinent information. In the process you may also find areas where you can streamline and simplify your finances. Take notes and make the changes later, otherwise you will split your efforts and double the time it takes to accomplish both tasks.

In your financial inventory you will want to create a list of all your financial accounts, including assets and debts, real estate holdings, titles, deeds, valuable property such as artwork or jewelry, insurance policies, retirement accounts, legal documents such as will and trusts, and contact information for important people involved in your finances, including your financial planner, accountant, or lawyer. Many of these items should also be included in your home inventory. Below are some of the steps you can take to create your personalized financial inventory.

List All Your Financial Accounts (Assets)

Your account list should include the contact information, address, account number, website address, user name, password, and other information necessary to access your account. This document will contain sensitive information, so you will need to protect it by keeping it in a safe deposit box, in a safe, or encrypted on your computer or external hard drive. Also consider keeping an encrypted file online. You can also keep the account number and password list separate – just make sure each is in a safe location and they are not stored together. You account list should include:

Bank accounts: high yield savings accounts, checking accounts, money market, credit unions, etc.
Brokerage and Investment Accounts – We have our IRAs through our bank, and we each have a TSP account (government version of a 401k), I have a 401(k) through my day job, a Solo 401(k) for my small business, and I have accounts through Vanguard and another brokerage account.
Retirement accounts: 401(k), 403(b), Roth or Traditional IRA, Thrift Savings Plan, pensions, annuities, etc.
Education accounts: 529 College Savings Accounts, Coverdell ESAs, etc.
Real estate: Deeds and titles, etc.

List Liabilities and Credit Accounts

This list should include lender contact information, account numbers, and a rough estimate of amount owed for each loan in your name. You want a rough estimate of how much you owe to make it easier for any survivors to get an accurate sense of your affairs.

Credit cards: list card issuer, number, and contact information.
Mortgage: lender information, escrow company contact info, purchase price, recent valuation estimate.
Personal loans: Auto loan, student loans, other loans.

Insurance and Other Financial Accounts

You will need to keep a copy if your insurance policies. If they are too bulky to print, then consider saving a pdf file to your hard drive or a portable thumb drive.

Health insurance and/or health savings accounts
Homeowner’s or renter’s insurance
car insurance
life insurance
disability insurance
long-term care insurance

Wills, Estate Plans, and Other Legal Personal Documents

Wills: Living will, last will and testament
Durable power of attorney (financial)
Durable power of attorney (medical)
Beneficiary designations for bank accounts, retirement accounts, life insurance, etc.
Legal business documents, such as letters of incorporation
landlord-tenant contract
other legal forms or estate planning documents

Non-Financial Accounts, Information, & Documents:

It’s important to keep track of other important accounts and information. The following items will either have intrinsic value and you will need this information in the event of an emergency, or the itms will have sentimental value. If it’s important to you now, think about how your survivors will view them if you pass away or are incapacitated.

Social Security Numbers – for all family members
Automobile information – VIN, License plate number
Titles and deeds – cars, property, etc; where they are located and other necessary info
Driver’s license number – expiration date
Medical contact info – doctors, dentists, etc.
Cell phone – account number, logon, password, voice mail password, etc.
Small Business – website info, logons, passwords, advertisers, etc.
Airline miles and various rewards programs – airline miles don’t always expire upon death
E-mail accounts – personal and professional
Other account information

Contact List

Next of kin and close friends
lawyer
accountant
financial advisor
insurance agent
physician
employer

How to Secure Financial Account Information

I realize there is a lot of sensitive information in this list – enough to be any identity thief’s dream come true if he got a copy of this list. That is why I plan on encrypting it. There are many ways you can do this, including free software such as KeePass, which is designed to do just this. My wife and I would share a password and all the data contained in our list would be secured by that password. We can also carry it on a USB drive, or upload it to a computer server so we can access it from wherever we are. There are also dozens of open source and commercial password managers which will offer similar protections. I’ll leave it to you do research which one is the best for your needs.

A Financial Inventory Helps you Pick Up the Pieces

Doing a financial inventory will help give you or your survivors a complete picture of your financial situation, and make it easier to continue in the event the unthinkable happens. I recommend creating a financial inventory annually, or every time you have a major life event, such as a birth/death in the family, moving, new job, purchase a new home, start/sell a business, etc. Your financial inventory is also useful for creating a will or a financial continuation plan.