by Ray Sagner on Jan 22, 2020
If your Swedish is a bit rusty, “döstädning” translates to “death cleaning,” and is associated with a book written in 2017 by Margareta Magnusson. To summarize in a short statement: somewhere around middle age you get rid of all the stuff you have accumulated that you have no more use for and that no one else must deal with after you pass. At an age north of 80, Ms. Magnusson states that part of her motivation came about after cleaning out several relatives’ possessions over her long life. One of my favorite statements in the book is that" the process is about a permanent form of organization that makes your everyday life run more smoothly"
I am all about minimalism, a state I seem to have naturally evolved into. That may be why I am good at my chosen profession: I like to organize and streamline my clients’ financial lives for themselves and for those that follow them. Having watched clients "clean up" and deal with loved ones’ possessions and having to clean up both of my grandfather's shops, I know it can be a trying experience. This article is not so much about getting rid of things but of organizing your financial life and to gain some sense of control. It is about having your financial life in one place on one document that you can easily access.
I have written before that “one of the strongest tonics for easing your mind is having ‘things in order.’” Upon reflection and experience, it is not true that everyone feels better when their financial lives are organized, or when the garage is finally cleaned up. While a cluttered garage may not be that important, having your financial documents in a form that you can readily access will give you a clearer picture of what you’re dealing with, thereby making your financial decisions easier. Also, having your financial information in one place will aid those who will take care of your affairs when you are no longer able.
In this first article of 2020, we will stick to a familiar strand and cover some timeless strategies for getting financial documents and other personal information in an orderly format. We will also discuss the benefits of a Letter of Intent for those of you who may need to use the information that you have gathered. Don’t just think about it -- ten good intentions do not equal one good deed. At some point we must act, so why not this year, this month, this day?
Step one: for your convenience, you should have a file folder, old style or digital, for your monthly bills and statements, as well as folders or binders for such documents as your insurance policies, investment statements, current year tax information, etc.
Step two: make a list of all your personal information such as the professionals you deal with and all of your account details. Keep in mind that the data listed on this document will provide easy access to the information, not just for you, but also for the person who may need to deal with your financial affairs for you. Once completed, the document should be kept in a secure place. Begin with the date the document was completed and include such personal information as your full name, SS number, date of birth, and drivers’ license number. If you are versed in Microsoft Excel, you can create headings across the top for the institution, type of account, account name and number, a contact person and their phone number. You should also include any passwords for online access. Include all of your single, joint, and business accounts, and indicate both assets (i.e. checking, savings, and investment accounts) and liabilities (i.e. credit cards and mortgages). It may be helpful, as well, to create a separate sheet which lists your beneficiaries for your various accounts.
If you would like an example, email me (Ray@TheLegacyGroup.com) and I will send you a template that can help you get started. You may then want to encourage your parents and children to complete a similar form. Once the form is completed, make a copy and give it to whomever you have designated as the executor of your estate. You can have them keep it in a sealed envelope until they need it and let them know that you may be updating it periodically and exchanging envelopes. Alternatively, you can do as I have done and put the information on a thumb drive, one for me and one for my executor. You could even upload it to the cloud so it can never be lost. Compiling all this information may seem like a time-consuming task at first, but it is an important step in simplifying your future, and it is time well spent.
Now, let us go a step further. I encourage clients to write a Letter of Intent to those who may be managing their affairs one day. The letter spells out the specifics concerning the “who, what, where, why, and how” of financial documents, special disposition of assets, and desired funeral arrangements. The point is not to leave your loved ones hurt, confused, or burdened.
As one who has gone through this process, I know it can be uncomfortable, so I understand why people are reluctant, but it is a valuable process. Not only does it help you clarify what you value, but it also shows that you value those you leave behind. Here’s looking forward to a healthy, prosperous and organized 2020. Cheers!
The purpose of this article is to inform our readers about financial planning/life issues. It is not intended, nor should it be used, as a substitute for specific legal, accounting, or financial advice. As advice in these disciplines may only be given in response to inquiries regarding particular situations from a trained professional.