There’s no doubt we live in a full-on digital world. So, it’s no wonder we forget that for some things, it’s important that we can access them in real life, outside of our devices. In the event of an emergency or your death, you can be a huge help to your loved ones by creating a legacy drawer now and filling it with hard copies of your most important documents.
What Is a Legacy Drawer?
If you've listened to Dave for any amount of time, you've heard him talk about the legacy drawer. But what is it?
Well, it's an actual, physical drawer—not just a folder on your computer—that houses all of the important information your family needs if something happens to you. Unfortunately, a will or estate plan won’t be helpful if they’re locked behind a passcode and no one knows how to access them.
For August only: Use code DAVEBLOG for 20% off your will!
While this part of planning for the future is not as fun as planning for retirement or that next dream vacation, it’s definitely a task that’s worth its weight in gold. Having your legacy drawer set up means eliminating a whole lot of added stress and confusion during a time when tensions are already running high.
How to Set Up Your Legacy Drawer
First things first: Make sure your legacy drawer is somewhere in your home. (It might even motivate you to clear out one of those pesky junk drawers you’ve been meaning to get to!)
The drawer should contain everything your spouse or family needs to know if you aren't around. That means anything to do with your financial life, your medical wishes, plans for your funeral, even all those passwords you’ve got memorized but no one else knows. And while you’re setting up your legacy drawer, go ahead and set up a safe deposit box too where you can keep a backup set of copies.
But don’t stress, we’re going to break down exactly what documents to include and how to organize them so your loved ones can find what they need quickly.
What to Keep in Your Legacy Drawer
Once you have your legacy drawer cleaned out and ready for documents, grab a stack of file folders and labels. You’ll want to keep all your files organized and easy to add to and sort through. Here are the 11 documents we recommend you keep in your legacy drawer:
1. Cover Letter
Don’t worry, this isn’t like a cover letter for a job application. This is simply a letter stating the purpose and contents of the legacy drawer. Nothing fancy, just a way to introduce your loved ones to what they can find inside the drawer.
2. Will and Estate Plans
You’ll definitely want to include any and all information pertaining to your will and estate. Don’t forget to include the names of the executor and powers of attorney.
3. Financial Account Information
This one’s simple: Anything that has money in it and your name on it should be listed in the legacy drawer. This includes account names and numbers and the amounts currently there.
4. Funeral Instructions
All the details surrounding your funeral should be included in your legacy drawer so your loved ones can fulfill your wishes. And get specific. Do you want to be buried or cremated? Is there a funeral home you prefer? What do you want included in your service? If you’re married, create a set of instructions for you and another set for your spouse.
5. Insurance Policies
This one’s a biggie. Think of all your insurance policies as the safety net you’ve worked really hard to create and pay into to protect your family. In the event of your death or an emergency, you want your loved ones to be able to access their safety net quickly so they can avoid being in limbo financially and emotionally. Gather and organize all your insurance information, including health, car, disability, term life and anything else insurance-related into one single document for easy reference. List the type of insurance, who the policy is for, policy numbers and contact information.
6. Important Documents
Any legal or other important documents you have should be included in this file. Think deeds, marriage and birth certificates, Social Security cards and titles.
7. Legacy Letters
Your legacy drawer is all about your legacy after all, so use this file to leave behind letters for your loved ones. Tell them how much you love them, what they’ve meant to you or anything that you want to make sure they know if you’re no longer around to tell them.
8. Monthly Budget
Add a copy of your written budget so your family knows how to operate the household in your absence. Make a note of any automated payments and the accounts they’re tied to.
9. Tax Returns
Keeping tax returns in your legacy drawer is like an insurance policy for yourself in the event that you get audited from the IRS. (And yes, you can get audited even after death!) Hopefully you never have to pull them out, but if you do, at least you’re prepared.
Write down all passwords, combinations, usernames and PIN numbers. (No judgement, this is also a great opportunity to update all your passwords from your dog’s name or your wedding anniversary to something safer.) This allows your loved ones access to any documents, money or information that’s left when you’re gone.
11. Safe Deposit Box Instructions
While you’re creating your legacy drawer, you should also set up a safe deposit box. Make a copy of everything you put in your legacy drawer and keep it there. Create a folder in your drawer that includes instructions of where your safe deposit box is and who has access to it.
And if you want one more added boost to your peace of mind, invest in a fireproof envelope where you can stash all of your legacy drawer files.
Once all your files have been set up, don’t forget the most important step. Tell your spouse or another trusted loved one where your legacy drawer is!
This is also a great time to share with them specifics they might not be aware of or that have changed over the years. Maybe you’ve changed your medical or financial power of attorney. Or maybe you’d like to give your grandmother’s ruby ring to someone else. Keep your loved ones in the loop when these types of changes happen.
Creating your legacy drawer might seem like a lot to do at first, but once you get going you can knock it out in 30 days or less. Then set a reminder in your phone or add a note to your calendar to revisit your legacy drawer every six months. Check to see if any documents need to be added or amended, or if you need to make copies of new or changed information for your safe deposit box.
Just think, with your legacy drawer in place, not only are you protecting your family but you’re also giving them one of the greatest gifts of all—peace of mind.
Ready to create your legacy drawer? Get started by creating your will and powers of attorney online in just 20 minutes.
And get your finances looking as neat and tidy as your legacy drawer when you enroll in the program that’s changed nearly 6 million lives. Check out Financial Peace University, a nine-lesson class that teaches you about insurance, investments and preparing for the future.