As many of you know, before I started my career as a Professional Organizer, I was a Paralegal/Legal Assistant for 30 years. After all those years in the legal industry, I just want to let y’all know that dealing with paper is something I know about. It’s boring, it’s voluminous, it’s lots of paper cuts but it is IMPORTANT!
It is important to:
1. Know what documents to keep and for how long
2. Know what documents to shred
3. Understand the “important documents” that you need for your protection: Insurance Policies, Wills, Trusts, Marital Agreements, Deeds, etc.
4. Make sure that these documents are up-to-date
5. Ensure that your “important documents” are properly executed.
I can’t tell you how often I see documents that haven’t been signed but should have been. Haven’t been updated, but should have been. Haven’t been notarized but should have been. Haven’t been renewed, but should have been.
The crazy thing is that the people that “should” have made sure that their important documents were current or properly executed are bright, professional, responsible people. Unfortunately, sometimes things slip through the cracks. The problem is that it can and does cause problems and those problems can cost a lot of heartache and a lot of money to rectify.
Examples: Both true stories
Story #1: My friend had an auto insurance policy that was on auto-pay. He liked that he never had to worry because his auto insurance was paid automatically every month. Until it wasn’t. There had been fraud on his credit card and the account had to be closed. The credit card associated with his auto-pay information wasn’t updated. The insurance company didn’t have the updated information and was unable to deduct the payment as the account was closed. Unknowingly, my client didn’t have insurance for 4 months. Unfortunately, the only reason he found out was because he got into a fender bender and called his agent to make a claim. He not only was unable to make a claim but he now needed to find other insurance as it was too late to renew the expired policy. The insurance company claimed that they had sent an email and left messages but my client claims he never received any communications from the insurance company. The end result was that my friend was out-of-pocket for the damage to his car. This could have been catastrophic had the accident been his fault and, worse, if anyone had gotten injured.
Story #2: Many years ago, I had made changes to my Trust and Will. My then husband and I went to the attorney to have the revised documents signed and notarized. He said he would send me the original in the mail as he wanted to make copies for his files. When I received the “original” in the mail I immediately filed it. I didn’t look at it again as I didn’t think there was a need to as we had just been to see the attorney and just signed and notarized the documents. A few months later a family member asked to see the Trust and noticed a HUGE issue. Apparently, the attorney sent me an incorrect copy. I immediately called the attorney but the damage was done. The family member who asked to see the document decided that I, having legal knowledge and experience, knew about the incorrect language and decided to hide it. She questioned my integrity which was hurtful but, more importantly, that relationship was never the same and caused a lot of problems. We ultimately received the correct copy Trust but the damage was already done. Had the family member not looked at the Trust, it could have caused even more damage as our estate would have been distributed incorrectly.
My points are many and are a result of lessons learned. Here are some things you can and should do ASAP to avoid problems:
1. If someone, anyone, even a trusted advisor, gives you a document to sign, READ IT FIRST.
a. It’s your responsibility to understand anything that you are signing.
2. If anyone sends you a copy of an executed document, make sure that the copy is the correct one and reflects the latest updates.
a. Do a comparison to make sure that you have the latest copy with the latest revisions.
3. If you receive a renewal on your insurance policy, compare it to your previous policy to make sure the coverage is correct.
a. Mistakes happen all of the time and situations change. That’s why its important to review your insurance policies every time they renew.
4. If you haven’t seen a bill on auto-pay deducted from your bank, call and find out why.
a. The missed payments will catch up and create a problem so don’t wait thinking they forgot to bill you.
5. If you’ve gotten divorced, had a child or your spouse has passed, update your Trust, Will, Health Care Directives and Power of Attorney.
a. This can avoid legal conflicts down the road.
b. Note: These documents should be updated every 5 years or so as the laws change.
6. Make sure that your beneficiaries on your Insurance Policies, Investment Accounts, etc. are up to date.
a. People come and go in our lives all too often. You don’t want someone you no longer speak to, get money because you forgot to make the necessary changes.
b. Note: These should be reviewed when you get married, divorced or have a child.
7. Think about naming your spouse, significant other or trusted family member on your contact information with insurance companies so that they can be notified if you can’t be reached.
a. This is a great precaution to avoid insurance policies from getting cancelled.
8. If there has been fraud on your accounts/credit cards, make sure that you notify any other institutions that they are connected to and update all of those accounts.
a. Make sure to also notify the three credit bureau’s: Experian, TransUnion and Equifax.
9. Make sure any important documents (see the ones listed above) are signed, dated and, if/when necessary, that they are notarized.
YOU MUST BE YOUR OWN ADVOCATE so “Dot your “I’s” and cross your “T’s”.