As a vice president at Exchange Bank, Debbie Kelley administers trusts and estates for people who typically have compiled the key financial and personal documents of their lives.
But on occasion the bank finds itself named executor for a deceased person who never passed along much information on the extent of his or her estate.
"We just go to the person's home and scavenger hunt (for documents)," Kelley said. "It's becoming more and more challenging because more people are doing things online and we don't have the passwords."
Financial experts say you can save your loved ones a lot of time and angst by organizing important documents before you die and letting someone you trust know where to find them.
"If you want to give a generous gift to your heirs, in addition to money, you might consider giving them the gift of time saved and stress reduction and peace of mind," said Julie Jones of Sonoma, the creator of the Estate Documents Organizer, a 90-page records binder.
The important documents typically include wills, bank accounts, property deeds, individual retirement accounts, life insurance policies and tax returns. But in the digital age, it also can include computer passwords, PIN numbers and details about your various online financial and social networking accounts.
Unless a person organizes such documents and conveys their location to loved ones, the heirs are left "trying to guess where they might be stored," said Christina Clem, a spokeswoman with the American Association of Retired Persons.
Without these documents, family members may fail to find important items.
As an example, Clem recalled how her grandmother died in 1998. Nearly 14 years later, a life insurance company contacted Clem and her brother about a policy that their grandmother had obtained, one the remaining family members knew nothing about. The grandchildren eventually received the policy's proceeds, but only because the company had reached out to them.
Before you can organize documents, however, you have to make sure you have an estate plan.
An estimated 120 million Americans don't have an up-to-date estate plan, according to the National Association of Estate Planners & Councils.
Part of the planning process involves creating a will or revocable living trust. Experts also advise spelling out who, if needed, will help administer your finances or make key health care decisions for you. The related documents are called respectively a durable power of attorney and an advance health care directive.
Creating the will or trust often prompts the gathering of key documents. Experts advised gathering all the needed documents in a few key places and then compiling a list of where each item can be found.
They also urged caution about keeping wills and some other key documents in safe-deposit boxes without a sure way to prevent the sealing of the box at the time of death. The inability to get access to the original will can cause lengthy delays for disposing of the estate.
"It took a year to get a court order in San Francisco" to open a safe-deposit box for one estate, recalled Gregg Clarke, a certified financial planner and the owner of Meritas Wealth Management, with offices in Santa Rosa and Larkspur.
Some experts recommended making and storing digital copies of key documents — a service some financial and legal firms now provide.
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