You were smart and crafted an estate plan in your 40s. You even updated it a couple times after you accumulated wealth over the years and after you retired. Then you passed away peacefully at an old age. Your estate plan spells out precisely what your wishes are -- but how will your loved ones know what your wishes were? Or that you even had any wishes in the first place?
They'll know because you had a Dox-Box.
What's a Dox-Box? A Dox-Box is a safe place that holds copies or originals of all the documents that will be important when you pass away (or lose capacity, such as from severe memory loss due to Alzheimer's). It could be a safe deposit box at a bank or a safe in your home. But it doesn't have to be an actual box or a safe. It could be a folder in cloud storage or a literal folder in a drawer. Or you could entrust someone else to safeguard your Dox-Box for you.
How secure should it be? There are pros and cons to making your Dox-Box ultra secure, such as in a safe deposit box. Documents in a safe deposit box will be very safe from fire, flood, and theft. But they come with an added monthly expense, and it might be problematic for others to get access to after you pass away. If you have a trust, you should title your safe deposit Dox-Box in the name of your trust so that your successor trustee can get access to it.
Conversely, there are also pros and cons to keeping your Dox-Box simple, such as keeping documents in a folder in your desk drawer. These documents might be susceptible to being misplaced, and they aren't as safe from fire or theft. But a setup like this will be easily discovered by a family member going through your desk after you pass away.
What's the best practice? Have two Dox-Boxes. One that won't ever get lost, stolen, or burned, and one that can be easily found by someone who might not even know it exists.
What goes in a Dox-Box? Think of anything that might be relevant or informative to your loved ones and beneficiaries when you pass away. Then put originals or copies of those in your Dox-Box. It's better to err on the side of over-including than under-including.
On the personal side, include things like:
- Will (including the executor's contact information)
- Trust (including the successor trustee's contact information)
- Your estate planning attorney's contact information
- Power of attorney for Business and Financial Affairs
- Advance health care directive
- Deeds to all real properties you own OR a list of the properties
- List of your bank accounts, investment accounts, retirement accounts, life insurance policies, etc.
- Description and location of specific pieces of property that will be passed on to your beneficiaries (such as heirlooms, jewelry, and art)
On the business side, including key business documents like:
- Corporate formation documents
- Vendor contracts
- Business succession agreements
- Buy-sell agreements
- List of the business's bank accounts
- Contact information for the business's attorney and accountant
- Instructions on how to operate your business without you and who should take over which roles (if such things aren't already addressed by contract)
Tell someone about your Dox-Box. At least one other person (preferably someone likely to outlive you) should know how to access your Dox-Box. Being smart enough to have a Dox-Box won't be worth anything if no one knows you have one.