Besides a will, an ICE folder is one of the most important estate planning documents everyone should have.
If I had to guess though, I’ll bet that most of you reading this have never even heard of an ICE folder. Similar to the financial planning tool we talked about in the last post, it’s an often overlooked or unheard of tool for estate planning.
In my opinion though, it’s such a vital component to an overall estate plan, that it’s usually one of the first few things my firm helps clients put together as part of an ongoing wealth management engagement.
So, if an ICE folder is so important, what in the world is it?
What is an ICE folder and why do you need one?
An ICE folder is a folder that helps your spouse or other loved ones handle your financial affairs “in case of an emergency.” Hence, the “ICE” part of ICE folder.
This document can either be a physical file or an electronic document on your computer (if it’s electronic, make sure it’s encrypted, just to be safe!).
Now, imagine for a moment that you’re driving to work or to the grocery store. Since you’re a responsible driver, your mind is on high alert and your focus is as sharp as a knife.
Then your cell phone rings.
You look down for just a second to see who it is. During that brief moment though, a driver headed in the opposite direction swerves into your lane. He crashes into your vehicle head on.
And you die instantly.
Or maybe you’re severely injured and you lapse into a severe coma.
Either way, you’re completely incapacitated and now someone else, either a spouse or other loved one, has to handle your financial affairs.
- Do they know what to do?
- Do they know who to call?
- Do they know what bills to pay?
- Do they know what accounts or debts you have in your name?
- If you died, do they know your funeral/burial wishes?
- Did you have any parting words you wish you could have left them with?
If you have an ICE folder, the answer to all of these questions is a resounding YES!
Now that I’ve convinced you of the need for an ICE folder…
What should you include in your ICE folder?
The list of items to include in your ICE folder is highly dependent upon each client’s individual situation, but I hope that the list below will give you a head start when putting together your ICE folder…
- Names and contact information of important people (i.e. relatives, doctor, accountant, financial advisor, neighbor, auto repair shop, alarm company, insurance agent, veterinarian, plumber, work contacts, attorney, will executor, work human resources, etc.)
- List of all financial accounts, locations, and numbers (i.e. checking/savings, retirement, investment, savings bonds, college savings, annuities, credit cards, etc.)
- User IDs and passwords from your password manager
- List of bills and/or debts, payment amounts, dates that you pay them each month, and customer service contact info
- Important health information such as allergies, dietary restrictions, medical history, and medications
- Emergency information (i.e. water/gas/electric shutoff locations, emergency contacts, etc.)
- Location and access information for other important files/documents (i.e. will, social security card, medical directives, other estate planning documents, passport, birth certificate, driver’s license, tax returns, loan documents, business agreements, etc.)
- Insurance and beneficiary information (i.e. life, health, disability, home, auto, etc.)
- List of all assets/valuables (i.e. homes, cars, storage units, jewelry, artwork, electronics, etc.) and pertinent information about each asset (i.e. location, serial number, model number, VIN number, estimated value, date of purchase, etc.)
- List and contact information of all organizations you’re involved in (i.e. church, alumni associations, professional associations, licensing boards, etc.)
- If you’re a business owner, include a copy of your business continuity plan and/or succession plan
- Personal letter(s) to your loved ones
- Organ and body donor information
- Funeral and/or burial notes and wishes
As I said, this list is not all-inclusive by any means, but it should give you an idea of the types of things you might want to include in your ICE folder. It also needs to be updated on a regular basis so that as things change, the information in the folder stays current.
In my opinion, at a minimum, an ICE folder should have a personal 1-2 page letter to your spouse and/or friends and family, giving them some parting last words. For example, if you knew that you were about to die and meet your Maker, what would you want to say to…
Your closest friends?
You shouldn’t feel the need to write a personal letter to everyone in your life, but certainly the people closest to you will appreciate you taking the time to say, “Goodbye.” Some people are fortunate in that they are able to do this in person, right before they die on their “deathbed” in the hospital.
But for most of us, death will be like a thief in the night, quick and unexpected.
Every breath and every beat of the heart is an undeserved gift, and one day, our next breath or heartbeat will be our last. It could be tomorrow or it could be 60 years from now. Either way, we shouldn’t take the time we have right now for granted.
So even if you don’t take the time to put anything else in your ICE folder, at least include a personal letter to your loved ones.
♪ ICE, ICE Folder ♪
In 1989, rapper Vanilla Ice released his hit song “Ice Ice Baby” and awkward wedding reception dances have never been the same since.
There is, however, one line in his infamous song that would be wise for us to consider…
“Anything less than the best is a felony.”
All kidding aside, I tend to agree with Mr. Vanilla on this point. When it comes to your estate planning, anything less than the best for your loved ones is surely criminal.
If you need some help putting together an estate plan, contact a financial advisor (like SageOak) that focuses on comprehensive financial planning and wealth management.
A good financial advisor will work alongside your estate planning attorney to help you put together a plan that’s right for your situation and that aligns with your beliefs, goals, and values.
So, what are you waiting for?
Stop reading this and go put together YOUR ICE folder!