This New Year, Resolve to Organize Your Financial Affairs

BY: Christine Sperry

The beginning of a New Year is a great time to make resolutions on what you want to accomplish in the days ahead. One resolution I encourage everyone to make is to get their financial house in order.

By taking the following simple steps to start your estate plan, you'll be well on your way.

Name Beneficiaries

Many banking and brokerage accounts allow you to name a beneficiary who will inherit those assets upon your death. No need to go through probate! In naming beneficiaries, there are a few items that you need to be aware of.

  1. The asset with a named beneficiary will not pass through your will or trust. Example: You have a young child and within your trust terms, your asset(s) will pass to your child, but not until he/she turns 30 years of age. If you name the child as a beneficiary of the asset(s), the terms of your trust would not be followed, and full control of the asset(s) would be in the control of the child upon your death.
  2. Another issue to address is ensuring the person listed is still the person you would like to have the funds. You might have listed your now ex-husband on an account back when you were married. It is good practice to review all your beneficiaries to ensure they are updated and correct.

Title Your Accounts

How your account is titled is also important. Working with your financial advisor or banking professional will ensure that the title is correct.

The title dictates how the assets will be passed upon death. Some examples include joint tenants with rights of survivorship (upon the death of one tenant, the asset[s] will pass to the surviving tenant), sole ownership, and tenancy in common (tenants hold title to the asset[s] jointly, with equal or unequal amounts of ownership [e.g., 70%/30%]). When your account titles are correct, you will ensure your assets go to the people or charities you have selected.

These are only two of many ways of going about getting your financial affairs in order. By taking these measures, you can prevent your wealth from going through probate or having the courts decide who will receives your funds. It is also important to note the value a financial professional and/or an estate attorney can bring. Both will work with you to make sure your wishes are honored. In do-it-yourself wills, there is always of you missing something important, and that mistake could derail your wishes.

If you would like to learn more, our Prime Time Plus Club will be hosting a seminar for its members on this topic on March 9, 2021, at 6:30pm. If you are a member and would like to attend, please contact me or Lois Boehnen for more information.

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