How to Properly Share Financial Information With Your Successor Trustee

When I first started working in this industry over 17 years ago as a law clerk, I quickly became aware of a problem that many people encounter after the loss of a loved one. How does a successor trustee determine what assets are owned by the deceased? One of the first calls I answered at the law firm from a successor trustee of his mother’s trust. He had a copy of the trust which put him in charge of distributing the assets to his siblings and himself as beneficiaries.

However, he wanted to know what the trust actually owned. Mom and Dad created the trust and shortly after it was signed Dad passed away. A few years later when Mom passed away, their son was charged with administering the trust. He lived out of state and had no clue where his mom banked at or held her money.

I placed the caller on hold so I could talk with the paralegals and attorneys to get an answer. The answer that I received was that the son needed to look around the house to see if they could find a current bank and financial statements and to check the mail to see what statements arrive. I relayed this information back the caller. It was up to the trustor to leave behind information about the accounts in the trust or the successor trustee had to figure out what assets that the deceased owned before the attorneys could help collect the assets and determine if probate was necessary to administer the estate.

Over the years many several more callers that were in the same situation. They had no idea what was retitled in the name of the trust and I would tell them to check the mail. In recent years more and more callers started to tell me that there is nothing coming in the mail. Often because the decedent was “paperless” and received everything in his or her email or did all of their banking transactions online.

Even in a Paperless World, Leave Financial Information With the Right People

If you were to pass away today how difficult would it be for your loved ones to figure out where you bank at and what assets you own? You may have a current estate plan that includes a Revocable Living Trust, but did you follow through and change the ownership of your bank accounts into the trust? Did you leave any information to tell the successor trustee where you bank at what assets are owned by the trust? Often times, when we meet with someone after the loss of a loved one, we find only the instruction letter from the attorney or document preparer telling the client to change their assets into the trust with no proof that they did. Other times we find nothing, or we find old and outdated financial records. So how much information should you leave financial information for your successor trustee while maintaining security and your privacy?

Leave Financial Records with Legal Documents

In a perfect world, the successor trustee would have all of the financial records along with a copy of the trust. You can share this information immediately with your trustee by giving them a copy now. You can also tell the trustee where he or she can find your financial information when the time comes (For example: The trust is in the file cabinet of my home office or provide the name and contact information of the law firm to help them administer the trust).

Use a “Digital Vault”

We provide our clients with access to a digital vault. This is a digital service that allows you to upload your signed legal documents and financial information. You can access your documents from anywhere at any time so long as you have an internet connection. You can also create accounts allowing your family to login with their own user name and password so you do not have to share your own login information. Additionally, you can control how much information the other users have access to. For example, you can give your daughter access to all of the documents while only giving your son access to your health care power of attorney.

Update Financial Records

If you change banks or financial advisors make sure to update the financial information included with your legal plan. Your digital vault will also help keep all of this information in one place.

Digital Asset Planning

I do not recommend sharing passwords or creating a list of the passwords for your accounts. Not only is this insecure, sharing passwords violates the most electronic terms of service agreements. However, the Revised Uniform Fiduciary Access to Digital Assets Act allows you to plan for and to direct what happens to your Digital Assets or information that is stored electronically. This includes the information about your bank accounts and electronic records (even if you get all of your statements by paper). This also includes how to plan for all of your electronic information in your email account. A good estate plan should include information about how to access digital assets and email, so you don’t have to share passwords with your successor trustee.

Let Us Help

Keeping your estate plan up to date. It is essential to avoiding probate and keeping the administration process as easy as possible for your loved ones. If you are interested in updating your estate plan, we can help. Dana and Associates can help you create a plan including digital asset language. Make sure to leave financial information for your successor trustee while maintaining security and your privacy! Schedule a free Personal Family Legal Session with Dana and Associates today.