The Swedes have a word –“dostadning” — that literally means “death cleaning.” This unpleasant term refers to something that many people do as they get older and downsize to a smaller home or assisted living facility. It’s getting rid of things you don’t use, need or have room for. There’s even a book called The Gentle Art of Swedish Death Cleaning.
If you’ve gotten to the age where you’re simplifying and decluttering your life, don’t forget to do the same with your finances. Just as getting rid of old clothes and furniture makes things easier for your loved ones after you’re gone, so does consolidating your financial “clutter” like accounts and credit cards.
It’s also a good idea to place your accounts in as few institutions as possible. This paring down and consolidation of accounts, like the decluttering of your belongings, will help your loved ones handle your estate after you’re gone.
You can further simplify your finances by setting up automatic payments for everything from utilities to newspapers to homeowners’ association dues. This simplifies the payment process and helps protect people who become more forgetful with age — as most of us do. Automatic payments can also be helpful if you are incapacitated, whether for a short or long period.
It’s also essential to make sure that you have designated one or more trusted family people in your estate plan to have powers of attorney over your finances and health care decisions if you are unable to do so. By having a health care directive in place as well, you can codify your wishes for things like what type of life-prolonging measures you wish to have taken.
While decluttering your home, gather the documents that your estate administrator and others may need when you die or if you become incapacitated. Keep them in one place, and let the appropriate people know where they are. These include:
Also create “in case of emergency” files that your trusted person or heirs will need. These might include:
- Estate plan documents
- Military records
- Insurance policies
- Birth and other certificates
- Driver’s license, Social Security card and other identification
- List of your accounts, loans and credit cards
- Property title documents
- Emergency contact information (including your attorney’s name and phone)
If you need help determining how best to go about your financial “dostadning,” your California estate planning attorney can provide valuable guidance.
Source: USA Today, “Estate planning: How to ‘death clean’ your finances,” Liz Weston, NerdWallet.com, Dec. 21, 2017