There are many practical steps retired clients can take to reduce the burden on their heirs and executors to save everyone time, money and hassle. Suggest these strategies to your clients to get them organized before they’re pushing up daisies.
“The difficulty is dealing with the physical stuff that people collect,” said Linda Chu, founder of Vancouver-based Out of Chaos, a professional organizing company. “It’s also the valuation system someone has placed on their possessions. Just because they’ve spent the money on something, just because it’s barely used, [doesn’t mean it’s] new and useful to somebody else.”
Chu often suggests a “house-cooling party,” the opposite of a housewarming party. “Invite family members over and lay everything out in strategic rooms — linens in the bedroom, for example,” Chu said. “Rather than giving you something, [family and friends] take something — and the story that goes with it — away.”
Unfortunately, selling or donating items doesn’t always work. “Nobody wants dining-room sets,” Chu said. “We can’t even donate [them].”
Media on dated technology can also be challenging to give away. “Many [children] don’t even want the records, much less the VHS tapes that are still very, very evident in homes I work in,” Chu said.
If your clients have sold, donated and given away items and still have a large pile of stuff, they can hire a professional organizer.
Chu said aging parents often want to reminisce about their possessions, but children may not have the time or the patience to walk down memory lane. “I come in, a stranger, and I don’t have that emotional attachment to [the retiree’s] stuff, yet [I do have] 100% compassion to deal with it,” she said. “We can deliver the cold, hard facts a lot less emotionally.”
Unwanted possessions aren’t the only burden that can weigh down beneficiaries. Disorganized financial documents can be even worse, particularly for executors.
“How many times have I gone into homes where they don’t know where the will is?” Chu said.
Rhonda Latreille, founder & CEO of Surrey, B.C.-based Age-Friendly Business Academy, said she’s heard of retirees locking their will in a safety deposit box — and only the will indicates who has access to the box. “There are lots of horror stories,” she said.
Kris Alary, investment, estate and insurance advisor with Bowie Financial Inc. in Kanata, Ont., said his firm supplies clients with an estate planning portfolio. “It’s a binder with dividers for insurance policies, financial accounts, credit card information, and lawyer and financial advisor [contact information],” he said, noting that most of his firm’s clients are 55 or older.
But simply collating that information isn’t enough, Alary said: “Encouraging [retirees] to let their children know the binder is in place, where to find it and how to access it is where we concentrate our effort in terms of educating our clients.”
Alary said some clients’ children “don’t know where all their [parents’] finances are, and some [clients] have accounts in 10 places. Some of them have prepaid funerals or have purchased insurance policies and the children have no idea they exist.”
You can encourage recent retirees in particular to use some of their new free time to clean up their finances.
If a client has a business, does it need to be dissolved? Can they close dormant bank accounts or unused credit cards? For active accounts, the client may want to create a password list for beneficiaries to access.
“[Passwords are] becoming hugely problematic in estates,” Chu said. “And it’s not just the passwords. It’s [also] those secret questions, such as ‘the name of your first dog’ [or] ‘your favourite teacher’s name.’ Sometimes there’s that second level of authentication that’s needed.”
Bowie Financial supplies an empty template into which clients can enter their passwords if they choose. “Some don’t want to,” Alary said, citing concerns of theft. (In some cases, sharing passwords also can violate a service’s user agreement.)
If a client does plan to share passwords, Chu advised starting now, “while one is mentally capable of doing so.”
In general, reminding your clients not to procrastinate is a good idea. “One of the biggest challenges, in terms of your own organization of your stuff,” Latreille said, “is always thinking you have lots of time.”