Gathering the details about your personal finances now can spare your family a lot of aggravation later. By Susan B. Garland, Contributing Editor August 1, 2011 EDITOR'S NOTE: This article was originally published in the June 2011 issue of Kiplinger's Retirement Report. To subscribe, click here.You think you have taken care of your heirs. Your estate plan is current. The life insurance policy is paid up. And the right computer passwords can unlock all the details of your IRA, 401(k) and brokerage accounts. There's only one thing you forgot: You haven't told your spouse or children where to find anything. SEE ALSO: Will Your Life Insurer Pay Promised Benefits? Sponsored Content Drawing up a letter of instruction now can spare your family a load of aggravation if you die or become suddenly incapacitated. At the very least, the letter should list all of your investment accounts, insurance policies, loans, cemetery plot records, real estate holdings, military benefits, overseas assets and even frequent-flier memberships. It should also provide the location of important documents and the names of key contacts, such as your lawyer, financial adviser and insurance agent. Advertisement Stuart Kessler, a director of J.H. Cohn, an accounting firm in New York City, provides a model letter of instruction to clients. He describes it as a "road map" for heirs. "You'd be surprised how many spouses don't know where the wills are," he says. Kessler's letter directs heirs to cancel club memberships and to call current and past employers regarding company benefits and stock options. If you'd prefer that mourners donate to a specific charity rather than send flowers, stick it in the letter. Soon after Larry Knapp retired two years ago from Caterpillar, his wife, Janis, asked to see all of the couple's financial records. They were stacked in piles and boxes in his home office. Knapp, 63, who lives in Eureka, Ill., says it took about 12 full days, spread over three months, to sort through everything. Knapp placed all relevant documents in a binder that Janis and their four daughters could find easily. "I am more peaceful now," says Knapp. "If something happens to me or to both of us, I know that someone can come in here in a painless manner without having to go through all those boxes." Advertisement As his guide, Knapp used the Family Love Letter (www.familyloveletter.com), a booklet created by John Scroggin, an estate lawyer in Roswell, Ga., and Donna Pagano, a financial planner in Westlake Village, Cal. Horror Stories of Neglect Scroggin says detailed instructions can ensure that heirs don't miss out on their inheritance. He recalls one client who had an insurance policy of about $500,000. The premium was paid automatically from his bank account. When he had a stroke and could no longer handle his affairs, his children terminated the bank account and transferred the funds. The policy was canceled because premiums went unpaid. "They lost all of the insurance," he says. Another client's children dutifully paid his nursing-home bills for years. When he died, they discovered he had long-term-care insurance. The insurer refused to reimburse them because they had missed the claim-filing deadline. Advertisement Pagano says the exercise also serves as a reminder to update documents. For instance, you may have forgotten to change your beneficiary designations on pensions and IRAs. "Some accounts have left survivor benefits to a previous spouse," she says. Also include funeral instructions and information you would like in your obituary, says Wynne Whitman, an estate lawyer for Schenck, Price, Smith & King, in Florham Park, N.J. Note if you already paid for your funeral and whether you'd like to be buried or cremated. Record preferences for music and speakers. Whitman says the letter should be kept in an "important paper drawer" at home. Let your family know where it is. "People need to be able to get to the letter of instruction quickly," she says. Make sure to note the location of any items you may have hidden. Whitman recalls one family whose relative had secreted away the sterling. "It was hidden behind the furnace," she says. "They had to use a metal detector to find it." A Simple Way to Protect Your Family -- Kiplinger's Your Family Records Organizer helps you record, organize and store all your important information in one convenient location so your family can find it in case of an emergency. Click here for more information.