At some point in their lives, most California residents begin to realize that they may not have many years left to spend with their families and loved ones. During these last years, most people try to make the most of them and cherish the lasting memories they have. They may also choose to prepare their estates so that their wealth can be passed on to their loved ones in the most uncomplicated way possible.
The practice of tidying up your estate for your heirs comes from an old Swedish tradition called dostadning, which literally means "death cleaning." Here's how you can follow the dostadning tradition for your heirs and loved ones:
Consolidate your financial accounts
Whether they're checking accounts, savings accounts, 401(k)s, individual retirement accounts or normal investment accounts, see if you can consolidate your financial assets into as few accounts as possible. Of course, you will want to make sure that you're not subjecting your estate to additional tax consequences -- but make your accounts as simple as you possibly can.
Set up automated payments on loans and credit cards
These days, anything that requires regular monthly payments can have an automated payment system set up to ensure that the bills get paid on time regardless of whether you're available to take care of it. This will prevent unnecessary late fees as your loved ones try to sort out what needs to be taken care of if you become too ill to do it.
Limit your number of credit cards
Having a lot of credit cards will make things more complicated for your hairs. Try to bring your number of cards down to two essentials. Close down the old cards slowly over a period of months so that you don't negatively affect your credit score.
Make copies of important documents and safeguard them
Copy your financial accounts, drivers' license, credit cards, contact info for your banker, investment advisor and attorney, etc. Organize them and put them in a locked filing cabinet. Make sure your executor or chosen representative has a key and knows how to find them.
The above steps are a great start to the dostadning process of "death cleaning." However, every estate is different and every estate needs to prepare for death in a different way. Be sure to educate yourself on all the legal options available to you in this regard.
Source: USA Today, "Estate planning: How to ‘death clean’ your finances," Liz Weston, Dec. 29, 2017