The "dead folder" is a physical or digital folder that an individual or family keeps that contains important information that will be needed in the event that someone dies. The folder, which is sometimes referred to as a "death folder" or "when I'm dead" folder, serves an important but often overlooked role in estate planning.
The purpose of the dead folder is to ensure that family members who survive you will be able to continue to take care of your affairs or the affairs of the household. This is particularly critical when one member of the household does the bulk of the family's financial management, such as paying bills, managing accounts and storing documents.
Without a dead folder, surviving family members can find handling the financial responsibilities of the household challenging. In addition, the risks can be more than simple inconvenience. Financial bills can go unpaid, and assets can go unclaimed. For instance, family members may not know about life insurance policies and will fail to claim them without directions from the deceased. State treasurers hold more than $32 billion in unclaimed bank accounts and other assets, the "Wall Street Journal" reports. In addition, the lack of a dead folder to guide survivors can lead to their overlooking estate planning instructions.
One method for preparing for a family member's death is to maintain a dead folder on a common computer that anyone in the family can access. This folder could contain a wealth of information and instructions that survivors can use to wade through the complex web of financial issues and other matters that arise when someone dies. The folder should contain information such as a summary of all financial accounts; passwords to accounts, computers and emails, if necessary; insurance information, including life insurance policies; the location of important paper documents; and information about the location and contents of safe deposit boxes, as well as the location of the keys to open them.
A non-digital, or physical dead folder might contain similar information as a digital dead folder, such as account and password information, but it also can include important physical documents. These documents can include an original will, life insurance policies, automobile and house titles, birth certificates, written instructions and other critical papers. Individuals can choose to keep multiple dead folders. One could be located in a folder in the home and could contain simple account information and instructions. A second could be located in a safe deposit box or other safe location and could contain critical original documents.