While I was already somewhat of a minimalist prior to my career in estate planning and probate, my experiences in this practice area have certainly increased my promotion of it.
It is often assumed estate planning is just about document preparation, fiduciary selection, minimizing taxes, avoiding probate, and preserving assets. While it is about those technical aspects and paperwork on the attorney side, decluttering, organization, and minimalism can be the hidden “X factor”. Minimalism is quietly one of the most powerful estate planning tools for the average individual. It can reduce stress for loved ones, lower the cost of estate administration, and, most critically, avoid disastrous consequences.
Clients sometimes seem annoyed when I attempt to obtain a detailed inventory of assets, life insurance policies, beneficiary information, and a variety of other information about their life and assets. “I just need a Will,” they say. And while it is true that I do not need all that information to draft a Will, as a good Will has a residuary clause which disposes of all property owned on the date of death and much of that information changes over the years, the inquiry is not without significant purpose. When working with an attorney on estate planning, it is the perfect time to review one’s estate, check for inconsistencies, and ultimately clean up and consolidate.
Organization and minimalism are among the kindest tasks you can do for your loved ones and future fiduciaries. Even if it is not something that gives you satisfaction, it will ultimately be of great benefit to your heirs and fiduciaries, as it has a direct impact on how smoothly your estate is handled and, in turn, enhances your final legacy.
There are several facets to discuss when addressing the importance of organization and minimalism in estate planning:
(1) the discovery process of estate administration;
(2) dealing with tangible personal property in your home or storage facilities; and
(3) unintended consequences and disastrous outcomes.
I have broken this blog into these three areas.
The Discovery Process of Estate Administration
There is often a misconception that the probate attorney has special access to information about a deceased person’s affairs. While there are strategies attorneys can use to obtain information, and financial advisors and CPAs can often hold a wealth of information, this process is tedious and time-consuming. In worst-case scenarios, asset discovery can involve repeated back-and-forth with financial institutions and even litigation simply to proceed with the estate administration process. Even in these scenarios, the personal representative must at least know where the decedent had assets in order to know which financial institutions to contact first.
One scenario I have encountered is where, after retaining my office, an estate personal representative drops off several banker’s boxes filled with decades of documents. It often takes hours just to determine a small portion of the contents that are relevant to administering the estate. If the personal representative takes on this task themselves, it may interfere with the grieving process, and mistakes may be made in deciphering what to provide to the attorney. Conversely, a “no trace that you were alive” or an “it’s all in my head” approach can be just as problematic as hoarding paper. Although mounds of paperwork increases expense and stress, it at least provides leads as to where to start. With no paper or direction, there is a greater risk of incomplete estate administration, which can lead to escheated assets.
Very simple steps can help minimize these issues. First, shred old and outdated paper. Retaining decades-old car registrations, bills, receipts, bank statements, and other paperwork is rarely helpful unless there is a very specific reason to do so upon the advice of an attorney or accountant. Records regarding defunct life insurance policies and closed accounts can send fiduciaries and attorneys on a wild goose chase. I cannot count the number of times I have investigated old life insurance policies only to confirm what was already assumed: the policy is no longer active. Copies of old Wills or trusts can also cause confusion and problems. For those who go paperless, using a password manager is critical, and fiduciaries should be added as trusted contacts with access instructions included in a master summary described below.
A master summary of current accounts, investments, insurance policies, professionals, telephone numbers, and access instructions, which is regularly updated, is critical. As you age, simplify and consolidate where possible. This is not to suggest that one should not diversify investments, which is generally a sound financial principle, but having four Roth IRAs across three different financial institutions is rarely a necessary diversification strategy.
Additionally, however uncomfortable, envision your own death. We all live in the privacy of our own lives. There are dozens of little things we do each day that only we know. Imagine someone else being you for twelve months and not being able to ask you questions. What would they need to know? Now envision someone going through your metaphorical “closet” if you were to die tomorrow. Is there anything you would rather not be seen?
I am not implying that most of us have something incriminating in our closets; however, many of us probably have something embarrassing. An erotic poem written in your 20s? A hateful letter never intended to be sent, written as a coping mechanism during a difficult friendship? I, for one, have a stockpile of cringe-worthy short stories and unfinished songs somewhere on my hard drive that certainly need to be decluttered. We are all entitled to our private thoughts, but upon death, much of that privacy is eroded. Your selected fiduciary will be going through your personal belongings and files, and although they are someone you trust, there may be things meant only for your eyes and mind.
Tangible Personal Property in Your Home or Storage (Your “Stuff/Junk”)
A significant aspect of estate planning and probate law involves tangible personal property and personal effects such as furniture, décor, art, jewelry, collectibles, pictures, clothes, household supplies, and other contents of a person’s home or off-site storage, which I will simply call “stuff” in this blog.
Some clients have more “stuff” than others, and this has nothing to do with the size or value of their estates. Individuals have different levels of sentimentality and, for lack of a better word, different tendencies to hoard. Family size, line of work, and hobbies also play a role. Clients with seven children likely have far more stuff than clients with no children or just one or two. Clients who run small businesses or side gigs from their homes may accumulate office equipment, tools, and supplies.
Some people are collectors. Others have emotional attachments to old gifts or inherited items. But here’s the deal, and I do not mean to be insensitive, but as the old saying goes, “you cannot take it with you.” A large amount of stuff, particularly disorganized stuff, often causes enormous stress for loved ones and can significantly increase the expense of administering an estate. Additionally, automobiles are often difficult and costly to deal with during estate administration. Individuals with six old cars sitting in their lawn should consider reducing that collection as they age.
A large amount of stuff increases the time it takes to administer an estate. While I design estate plans to give personal representatives broad discretion to deal with “stuff,” that is not always the case, and personal representatives are often required to coordinate with family members. This additional time increases expenses and can result in missed opportunities. Stuff must be dealt with before real estate can be sold, which often slows down the process and causes lost sales opportunities. If items are moved into storage, the expense can be enormous. If the decedent was already renting storage units, those costs continue to accrue until the items are sorted, removed, and distributed. Junk removal companies are often brought in, adding yet another expense.
Additionally, it is often stuff of little monetary value that causes the most disputes among heirs. I have spent an immense amount of time dealing with sibling disputes over a parent’s belongings. These disputes often involve “he said, she said” claims about what a parent had or intended. Even when items and recipients are listed in a Will or trust, this often increases the time and expense of estate administration. When clients bring in long lists of items to include in their documents, I often cringe and initiate a conversation about alternatives. Distributing long lists of stuff at death frequently increases costs rather than reducing conflict.
What are the alternatives? Most of us need some amount of stuff to live, and we will likely die owning some amount of stuff. That said, we can limit what we accumulate and begin downsizing and decluttering as we age. Many of us have closets, attics, or storage areas filled with items that are forgotten or kept “just in case.” Good estate planning involves taking control of those items now. For sentimental items that are not appropriate to sell or donate, consider transferring them during your lifetime.
An example I often give clients is an old Yamaha guitar my father inherited from my grandfather. My father already had a guitar of his own so instead of holding onto my grandfather’s guitar, he had it restored and passed it along to me during his life. This allowed him to enjoy the gift and see me enjoy it. Testamentary giving is important, but it leaves the donor out of the equation. Lifetime gifting preserves control and allows you to experience the joy of giving. If you do transfer items during life, it is critical that possession is actually transferred and that the item is removed from your home.
It is also important to ensure that only your own stuff is in your home and storage sites. For clients with adult children, there often comes a time to ask them to retrieve their personal belongings. The personal representative has a duty to inventory the stuff in your home at death, so ensuring that items belonging to others are removed or are clearly documented as someone else’s is critical to avoid disputes.
Lastly, if there is stuff you expect your heirs will not want or that will need to be sold, sell or donate during life if possible. Estate administration operates under deadlines. Many items, especially collectibles, are not well-suited for forced or time-sensitive sales. Rare or unique items often require patience to achieve fair market value, which is rarely feasible during estate administration. For example, a rare comic book may need to be listed on eBay for months or years for the right buyer to come along willing to pay a collector price. In estate administration, this is not feasible. As a result, these types of items are often undervalued and sold at a discount.
Unintended Consequences and Disastrous Outcomes
The real question is what bad outcomes can occur when decluttering, organization, and minimalism are not considered during the estate planning process. On paper, I can design an immaculate estate plan, but if it is based on incomplete, inaccurate, or unclear information, it may be far less effective than intended.
Many of these outcomes have been hinted at throughout this blog, but they bear repeating. The first is excessive time and expense. Failure to organize records, consolidate accounts, and deal with “stuff” can result in countless hours of work and thousands of dollars in legal fees. In some cases, where an estate consists primarily of stuff with little liquidity, the personal representative may even have to advance personal funds to deal with storage and disposal.
The second outcome is lost assets and incomplete estate administration. Without proper organization, assets may go undiscovered and ultimately escheat to North Carolina. If discovered years later, reopening the estate is inefficient and costly. Additionally, if debts are unknown and assets are distributed prematurely, the personal representative may face personal liability.
The third, and perhaps most serious, outcome is significant assets passing to unintended recipients. Beneficiary designations often remain unchanged after major life events such as divorce or remarriage. Old life insurance policies and retirement accounts frequently name former spouses or outdated beneficiaries. Without organization and regular review, these assets may pass outside the estate plan entirely.
A fourth related outcome is family conflict. When decluttering and organization are ignored, inconsistencies often arise. A Will may leave everything to children, while a major investment account names a sibling as beneficiary. Even innocent oversights can lead to litigation. Additionally, excessive amounts of accounts and “stuff” increase the likelihood of disputes. If an adult child has stored valuable items at a parent’s home for decades, siblings may later dispute ownership. Minimizing accounts and “stuff” and addressing these issues during life significantly reduces conflict.
In Conclusion
Decluttering, organization, and minimalism are not merely lifestyle trends, they are practical and effective estate planning tools. Thoughtful organization reduces administrative costs, minimizes disputes, prevents lost assets, protects your privacy, and helps ensure that your estate plan works as intended. Addressing these issues during life is one of the most meaningful ways to protect your loved ones and preserve your legacy.
Andrew M. Brower is a Board Certified Specialist in Estate Planning & Probate Law at Law Firm Carolinas, which has five offices and a statewide practice. For questions about estate planning and administration, wills and trusts, guardianships, or Medicaid/long-term care and asset protection, contact Law Firm Carolinas.