Legacy planning by formal definition is a financial strategy that prepares a person to bequeath his or her assets to a loved one or next of kin after death. If you aren’t careful, you may end up passing on more than cherished assets to the ones you love.
It’s a human peculiarity—as we travel through life we collect stuff. Lots of stuff. The late comedian George Carlin performed a whole stand-up routine about stuff. In it, he quipped, “A house is just a pile of stuff with a cover on it. Sometimes you gotta move gotta get a bigger house. Why? No room for your stuff anymore.” Even the homeless are collecting more stuff. Recently, I saw a wayward person walking down the sidewalk with three shopping carts tied together like train cars piled high with his ‘stuff.’”
If you don’t purge down your “stuff” while you’re alive, someone else (spouse, kids, friends) will have to go through it after you have moved on. Even God doesn’t want you to arrive at the pearly gates with your stuff — he made it impossible to take it with you.
The problem with someone other than you going through your life possessions is a matter of perception. What you see as a treasure—like that beer bottle cap collection—or a necessity—keeping twenty years of old tax return copies—your family members most likely see as junk and unnecessary. Yet in your absence, they have no other choice but to ponder endlessly while trying to decide whether to combine your old stuff for posterity sake with their growing pile of things or make the seemingly callous decision to toss the item in question in the recycle bin. Anyone who has gone through this exercise postmortem will likely describe it as painfully difficult and so time-consuming.
Sometimes reducing the size of your accumulated stuff is mandatory. As parents become empty-nesters and downsize their primary homes, most will likely need to reduce the volume of stuff to match the reduced size of their new digs. Unfortunately, many people don’t realize their accumulated possessions won’t fit in the smaller abode until shortly before moving into it. Downsizing both housing and stuff simultaneously with a deadline can be an extremely stressful activity. Not only are you forced to part with the dinner place settings for twenty-four or the world’s largest collection of metric nuts and bolts, but you also have limited time to decide each item’s fate. This is like a twisted version of the game show Let’s Make a Deal—only in reverse.
Regardless of your current age, do yourself and everyone you know a huge favor by taking action today to lighten the load of stuff you have accumulated over your lifetime thus far. Don’t wait until your world is getting smaller either by your design or fate to rid yourself of at least some of your nonessential possessions.
The four living spaces that accumulate the most stuff are the closet, garage, attic, and basement. Conduct a recycle audit of the unused things in these four spaces annually, and you are on your way to a clutter-free lifestyle, maybe with the exception of the adult child living in your basement. If you have one of these, be thankful they usually don’t come with much stuff.
To reduce your paper clutter, ask your bank, investment, insurance, and tax professionals about what documents you need to keep and for how long. What you are not required to retain, shred. You might be surprised to learn most financial documents are institutionally stored automatically for you.
For the stuff you wear, some people adopt a rule for clothing apparel: if I haven’t worn it within a certain time frame, someone else needs to.
If you still have paper photographs, convert them to digital storage media, and unless they are antique and valuable shred the originals. This action protects these irreplaceable images from fire, theft, fading, and the tedious task of someone sorting through these photos trying to figure out who all these strangers are in the pile of pictures you left behind.
Next, ask yourself this question: If I were to suddenly pass away or go into a coma, would anyone know where my important financial stuff is located? Things like insurance, bank, investment, and retirement accounts will need to be accessed to pay your expenses and provide for your survivors’ financial needs if you are suddenly not able to do so. For most people, the answer to this question is no. If this is you, another critically important legacy exercise is to create a document locator for the benefit of your spouse or personal representative. A document locator functions as a key to where your important papers (wills, power of attorney, trusts, financial accounts, life insurance policies, vehicle titles) are located. Also significant, list computer or cell phone passwords on your document locator so someone can access the information you store on these devices.
Because a document locator discloses everything about your personal identity and estate, its safekeeping is vitally important. Only you, a spouse, or trusted estate personal representative should have access to this document. Many people find it helpful to update the document locator annually when they file their taxes.
For many of us, the business of life is always about the future. Most of us live by the adage that someday we’ll get rid of the clutter in our lives and create a way to make things easier for our heirs.
Make a commitment today to reduce the stuff in your life so someone else doesn’t have to. This way, your legacy will be about the wonderful, caring, thoughtful person you were rather than leaving your survivors wondering, why did he or she keep all this stuff?
Go to https://retirementrecess.com/retire-ready-resource-center/ and download the free document and asset locator plus the beneficiary review worksheet located in the extra credit section.
Jim Collier, author of Retirement is Recess for Grown-Ups and the blog The Retired Retirement Planner, is the founder of RetirED LLC, a non-affiliated retire ready resource company located in Larkspur, Colorado.
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