I spent Valentine’s Day in Midland, Texas, talking about putting a big red (Valentine-worthy) bow on top of your estate planning package. After signing the package of estate planning documents, our work is not complete until we add the bow on top. The red bow is a “Red File,” a collection of information your family needs to know that is not in your estate planning documents. Click here for a copy of my presentation.
We have described the Red File in a previous post (see “Create a ‘Red File’ to Prepare Your Heirs for What’s Coming”), but the topic is so important it merits covering again today. A Red File provides your family with a roadmap to guide them in four key areas:
- Your care during incapacity
- Estate administration upon your death
- Succession planning for your business
- Creating a lasting legacy
It includes items such as key contacts, passwords, caregiving wishes, and heartfelt reflections.
A Will tells who inherits your assets, but it doesn’t tell what you own or where those assets are located. Handing an executor a Will without more information is like telling them where to drive your car but not telling them where the keys are.
Like most estate planning tasks, it’s tempting to postpone creating a Red File until “later.” However, playing the waiting game is risky. Once dementia sets in or a traumatic brain injury occurs, it’s too late. Furthermore, death often comes without advance warning. The leading cause of death in the U.S. is heart disease. For two-thirds of women and half of men, their first symptom was death—not chest pain, not discomfort in an arm, not shortness of breath.
Given the uncertainties, I urge all to complete our Red File checklist. This guide is forever a work-in-progress. If you think of items we should add, please forward your ideas to us. We welcome your input to continue improving this valuable roadmap for your loved ones.
Marvin E. Blum
Marvin Blum speaking to the Midland-Odessa Business and Estate Council on “A Red File: Putting a Bow on Top of Your Estate Plan.”