From the July 2004 issue of Investment Advisor • Subscribe!

What's in the File Box?

Although it's not cost-effective, in that we don't bill survivors for it, in our practice we tell survivors not to bother reading every little bill or document in their file box. Instead, we tell them if they see something with an account number or dollar sign on it, toss it in and we'll go through it, eliminating duplicates, putting aside what is unimportant or not time-sensitive, and segregating what is important.

In doing this, we've found money that survivors had no idea was available. We've found life insurance policies, annuities, and other assets from companies that typically do not send out statements.

Remember that for most people, knowledge of and documentation for many financial products acquired during a lifetime--such as company-provided or credit card life insurance policies and the like--can easily be forgotten or mislaid. Sometimes, the only proof of such coverage is a weathered, 25-year-old statement crumpled up inside a folder stuffed with memorabilia or other items of no financial consequence.

Getting the survivor to collect all the data is an important first step. We try to reassure her that she is not going to lose her home or have her assets seized if every little bill isn't paid immediately. Our goal is to help her avoid needless pressure, and the accompanying dissipation of energy and emotions. Bear in mind that while some survivors take comfort in sorting through all the papers, considering it a kind of salve for the emotional pain, that doesn't mean they will do a thorough job or know what to look for. I have found that the process of uncovering and dealing with all the attendant details and cleaning them up typically takes a year or more. Unfortunately, removing the deceased's name from an insurance policy can't be done with the snap of a finger. The correct forms must be obtained, properly prepared, and sent to the appropriate people. Despite your best efforts, some things will still go awry; count on it. That's why follow-up tracking is a must.

All this is an enormous burden to lift from the survivor. It's time-consuming, detail-oriented work, and would cost a considerable sum if managed by a CPA, attorney, or other professional. As financial advisors, we can afford to do it at a lower cost as a door-opener to a potential lifelong advisory relationship with the survivor.--Frank Patzke

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