How I 'Found' $300,000 for an Elderly Relative

On my family’s annual pilgrimage to the Northeast in late June, I took two days to help a 94-year-old relative get her financial house in order. I didn’t find any money buried under a mattress, but I did find some hidden in places most people don’t look – but they probably should.

I knew she had updated her will after recently moving to a new state, but I was not certain what else she realigned. So, when I began digging through recent tax documents, I made two startling discoveries. First, it turns out she has $300,000 in a bank stock that our family thought was only worth a few thousand dollars. And, second, we found cash from a life insurance policy paid out more than 20 years ago.

After getting over the initial shock of these findings, we went about piecing together the rest of her financial puzzle. Over a 48-hour period, however, I turned up more of what I expected: lots of missing or outdated information. But after a lot of tedious, time-consuming work, all key documents have been located and every cent she owns is accounted for.

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Lots of Gen Xers and Baby Boomers with older relatives may need to go through a similar exercise in the coming years. For those of you in this situation, here are some guidelines to reconstruct your loved one’s financial house:

Collect Key Financial Documents

Ask your loved one to gather copies of the following documents:

• Will, Revocable Trust and Financial Power of Attorney;
• Bank, brokerage account and Social Security;
• Cost basis of all investments;
• Website log-in credentials for any financial assets (if available);
• Estimate of monthly living expenses;
• List of all beneficiaries for Individual Retirements Accounts, including names, dates of birth and addresses;
• Statements for life insurance policies and annuities;
• A list of any other assets and debts, such as house, car and jewelry.
• Most recent tax returns.

Recent Tax Returns are Critical

As you begin collecting documents, the most important one to help uncover current assets, and a great starting point for your detective work, is the tax return. It can help nail down what assets your loved one owns, as well as the income they have coming in from pensions, annuities, real estate investments, business interests and Social Security. This is like having the answer key to a pop quiz!

Schedule B Is Key

This document is filed to report the interest and dividends received each tax year and led to the discovery of the $300,000 in bank stock. I noticed on the most recent Schedule B that my relative was receiving $5,000 in dividends from this stock. If you can’t find any paper statements or log-in information to financial websites for your loved one to track down each asset, start by asking the tax preparer for a copy of the 1099 form for each asset so you will know which company to contact.

Once you have a full list of assets, debts and current statements, including all insurance policies and the tax return, set them aside in a large envelope marked “Important Documents – Tax and Financial.” If you refresh this package once a year, it should take less than one hour to maintain.

Make Certain Key Documents are Signed

These include current copies of a will, financial power of attorney, health care power of attorney and any trust documents. In going through my relative’s legal papers, I found pages 1 and 8 of her will, but the rest were missing. After a long search, we found the missing pages and stapled them together.

She also had several unsigned copies of her health care power of attorney document, so I set those aside. Once we had all of the current legal documents signed, I compiled them into one envelope marked “Important Legal Documents.” A copy of the Social Security card, birth and marriage certificates can be placed in here, too. This envelope only needs to be refreshed each time an update is made to the will or other legal paperwork.

Make Copies for Advisers and Others

Finally, provide copies and access to files to people who serve as professional advisers, such as attorneys, accountants, financial planners and insurance agents. In addition, share contents of your envelope with your relative’s executor, financial and health care agent, and/or another relative who lives nearby.

If There is Complexity or a Lot of Questions, Hire a Financial Adviser

My relative wanted a fresh start in her new hometown, and she has enough moving parts to her finances that we met with a local Certified Financial Planner professional I vetted in advance of the meeting. One reason this meeting was so productive was we brought the organized envelopes with us, and they could give us timely advice.

Spending a few hours preplanning and getting organized now can save hours of time-consuming searches and expenses when your loved one is no longer here. And you never know, it can also bring nice surprises — like the ones I found — that will benefit your family’s future generations.