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The folder…

By Chris Webb - Topics: Inheritance Tax, Madrid, Spain, Succession Planning, Wills
This article is published on: 10th August 2020

I´ve been playing around with this article during the past few days, trying to fill in some spare time during the weeks of this long hot summer we have here in Spain. I realised quite quickly that writing things that will be of genuine interest could be quite hard so for this article I´ve decided to share with you what I personally am doing at home right now.

Considering some limitations of movement right now it would be a great time to give this some thought.

One piece of advice I always give to my clients is to prepare “THE FOLDER”. You´re immediately wondering what I´m going on about, let me enlighten you to what it is and why you should do it.

For me personally I am reviewing my folder and checking its updated. Interestingly I needed to refer to my folder yesterday and realised I still had some older information on there which isn’t relevant anymore, so tonight’s job is to review and update.

There are many scenarios where you´ll be thankful for making the folder. When I moved house two years ago I went straight to the folder and had all of the companies contact information as well as policies or account details which made informing them all much easier, on the flip side I´ve also lost a family member where finding their folder reduced the stress in dealing with their estate.

In moments of stress you find yourself trawling through endless pieces of paperwork to ascertain assets and account details, then you get that lightbulb moment…….. why wasn’t it all documented.

The Folder | Chris Webb | Spectrum IFA Group

What is THE folder?
It is a single file (digital or physical) where you keep all your important personal and financial information together. It allows easy access to these documents if you’re no longer around to help. It is even more important to have it in place where one family member takes the lead on the family finances. That includes paying bills, managing accounts and storing documents.

As a family we decided to do both a physical folder and a digital folder. The digital folder is password protected, both me and the wife have access to this, and we have shared the password with close friends should anything happen to us. In the digital folder we have shared as much information as possible for all our assets.

For the physical folder it is vital to only list information that would not create a problem should that folder end up in the wrong hands. So, we have only listed the names, telephone numbers, policy / account numbers of all our assets in this folder. It would give enough information for someone to be able to deal with our affairs with minimum hassle.

Is it worth the effort?
Well, I think it is worth the effort. A time of loss can be stressful enough without having to try and piece together the deceased’s financial affairs. This can be a really difficult time for family members.

However, preparing THE folder is much more than avoiding stress; if you leave behind an administrative nightmare you could delay access to inheritors’ access to funds and potentially cost a small fortune in legal fees.

To give you an example of this, the UK Department of Work and Pensions estimate that there is currently more than £400 million sitting in unclaimed pensions pots in the UK. Imagine trying to find out if you have one.

chris webb Spectrum IFA

Which is best physical or digital?
As I mentioned, we have done both and I believe most people would do the same. Some people still love to have information in physical form, something you can get your hands on. The younger generation tend to rely solely on digital devices. I don’t think it matters which way you do it, as long as you do it.

What goes in the folder?
Its essential to list what assets you have, where they are and important contact information for each asset. Keep copies of any insurance policy documents, pension statements etc. I have put a small list below which would help most of you, but you do need to look at all your assets individually to make sure the list is right!

  • Life insurance policy documents
  • Personal pension documents
  • Employer pension details
  • Details of any entitlement to state pensions
  • List of bank accounts with account numbers, login details, passwords etc
  • Details of any credit cards
  • Property, land and cemetery deeds
  • Proof of loans made
  • Vehicle ownership documents
  • Stock certificates, brokerage accounts, investment platform details, online investment account details
  • Details of holdings of premium bonds, government bonds, investment bonds
  • Partnership and corporate operating/ownership agreements (including offshore companies)

How often should ‘THE’ folder be reviewed?
I would recommend reviewing the folder on an annual basis, but if you’re extra diligent with it you should review and update every time something changes. For example, if you change insurance companies then add the new details and delete the old. This is a continuous job, its not something you do once and never look at again.

Finally…
Tell someone about your folder. Someone needs to know you have made one and whether it´s digital or physical. There is very little point going to all this effort if know body knows it exists.

Now I´m off to review my own folder, and it needs reviewing. I noticed yesterday that whilst my financial assets are up to date, I haven’t updated our vehicle details and a few other things which had gone unnoticed. Lets do this!

If you have any questions about creating your own folder feel free to reach out!

Article by Chris Webb

Chris WebbIf you are based in the Madrid area you can contact Chris at: chris.webb@spectrum-ifa.com for more information. If you are based in another area within Europe, please complete the form below and we will put a local adviser in touch with you.

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