Recently, I watched a 60-minute news story about how some of the largest life insurance companies don’t pay benefits even when they know the policyholder has died. Insurance companies claim that it is up to policyholders’ beneficiaries to contact the insurance company and to file a claim in order to collect whatever death benefit may be due them. But if beneficiaries are unaware of the policy, they don’t know to file a claim.

Do you want to know another scary fact? The news reported that on some whole life insurance policies, even when the insurance company knew the client was dead, they still deducted the monthly premiums from the client’s account.

So, what is the point of paying years of insurance premiums when your family may not collect the death benefit? This is just another example of why it pays to be organized with your estate planning. After I draft my clients’ estate plans, I encourage everyone to make a list of all accounts that are in their name and keep a copy with their estate planning documents. That way if something happens, the executor or trustee knows where to look and what companies to contact.

For one reason or another, many people are afraid to tell their friends and family members exactly what their estate planning documents say. You really do not have to tell everyone everything. At a bare minimum, you should tell the person whom you have listed as trustee or executor of your estate where are your estate planning documents located and how they can access them. There is no point for you to spend the money and draft the documents if no one knows where they are. Upon your death, if your estate planning documents can’t be located your entire estate will have to go through probate as if no documents were drafted.

In summary, it pays to be organized and to have the tough conversations with your family members.  They will appreciate it in the end.