Executors will thank you for your well-organized personal files.
Twenty years ago, the executors of an estate would find most information about the deceased’s assets in a valuable-papers file. Hardcopy documents contained the information needed to determine the value of investments, debt, tax requirements, etc. necessary for carrying out the wishes of the deceased and meeting the demands of the Canada Revenue Agency.
Electronic Files Instead of Paper
Electronic documents can now provide evidence of past transactions. These documents are easy to create and store and are accepted as evidence by the courts. The problem for executors, however, lies in how well transactions were recorded and organized by the deceased. Those who set up a computer-filing system may find the following of benefit.
Create a main folder with an easily identifiable name such as PERSONAL DATA.
Within the main folder, set up various subfolder categories such as:
- credit cards
- line of credit
- household expenses
- property taxes
- Internet service provider
- cable television
- security system
- offsite server storage
- personal property
- income tax, CPP and OAS
This system will permit your executors to understand quickly how the information has been organized.
Set up electronic filing categories and sort each document into the appropriate category. Data received in hard copy should be scanned and saved in the appropriate electronic folder. The original hard copy document should also be saved in a filing cabinet.
Establish annual subfiles within the various categories for data received yearly, quarterly or monthly. Owner-managers should create parallel categories
for business documents.
Passwords and Encryption Keys
Establish a protocol for password storage. For example, create a subfolder listing the password for each account, or store them in a separate password file. Passwords are needed to log onto the:
- offsite storage locations, hard drives or USB drives
- email accounts
- online banking and investment accounts
- system provider
The account name, number and the Internet access codes for the Internet provider should be readily available should the executors experience a system failure.
If your computer is set to fingerprint-read or iris-scan only, modify the software to accept keyboard passwords as well.
As a precaution against the loss of electronic data, a copy of the passwords should be printed and stored with a trusted individual such as a family member. Because spouses/partners usually travel together, both may die at the same time. It is wise to provide a secondary trusted individual with a sealed copy of the passwords. You may want to provide your lawyer with sealed documents to be opened on your death.
Existing Hardcopy Data
Keep hard copies in a physical file under the same file name as the electronic copy. A PDF format ensures the document is an accurate facsimile of the original. Original hardcopy documents that need to be kept in physical form are birth certificates, citizenship papers, passports, marriage certificates, and property title or deed documents. A scanned electronic file of these documents should also be created in case the original physical document is lost.
Keep backup copies. In catastrophic circumstances, such as a fire or natural disaster, the original source as well as the backup maintained at home may be lost. Consider storing copies of important documents in an offsite backup facility. Most virus protection companies provide adequate backup to accommodate these files either free or for a minimal charge.
Provide the executors with the:
- combination numbers and/or location of the keys for home safes
- location of keys for the house, vehicles, business, outbuildings, recreational assets, etc.
- names, addresses and contact numbers of investment brokers, lawyers, accountants or tax advisors
- ownership and insurance papers
- safety deposit box location, box number and location of the keys
- location of the original will.
Good Files Facilitate Settlement
Keeping your affairs in order makes settling your estate easier. Keeping well-organized electronic files is one of the ways to assist your executors settle your estate correctly and expeditiously. Precisely labelled files, readily available and up-to-date passwords, plus asset lists and hard copies of important documents in easy-to-find locations as well as the names and addresses of your lawyer, accountant and other important persons will not only make your day-to-day life easier but will also ensure your executors are able to deal with your estate.
The information provided on this page is intended to provide general information. The information does not take into account your personal situation and is not intended to be used without consultation from accounting and financial professionals. Allan Madan and Madan Chartered Accountant will not be held liable for any problems that arise from the usage of the information provided on this page.