Linda P. EricksonLinda P. Erickson, CFP®, is the president of Erickson Advisors and a registered principal offering securities through Cetera Advisor Networks, LLC, 336-274-9403 lindae@ericksonadvisors.net.
Spring cleaning used to be a time when we really cleaned. Now it’s an expression for an exercise where many of us resolve to “get organized” or “get my affairs simplified” or some version of launching a new year with a better version of the old. As we age, this effort at organization usually turns to documents and legacy decisions.
We recently began offering a service we call Final Affairs Review. Knowing our lives are often complicated and scattered, we realized that wrangling the disparate pieces every once in a while is a very good practice. You may be a long way from anything final, but imagine if you or a loved one were facing something final.
A very good friend of mine who is an estate and trust attorney has often said, “Plan your retirement as if you will live forever; plan your estate and final affairs as if you will die tomorrow.”
Here is an abbreviated list of items to review:
- Review will and power of attorney documents. Are the names of people responsible for you at your end-of-life and beyond still the right choices? Are the right people matched with the right skillset?
- Review insurance policies, annuity contracts, payable or transfer on death brokerage and bank account registrations, pension and trust documents. Are the beneficiaries named still who you want to inherit the account? Is there a better choice of named beneficiaries when looked at from a taxation viewpoint? If the primary named beneficiary is deceased, do you still like the contingent beneficiary, and if there is no one so named, get with your advisor very soon to name a new primary beneficiary.
- Review your charitable bequests in your wills and trusts. Do you see any you want to change? Check the balance in the accounts intended for the charity to verify that your intended gift can still be funded with the named account. As you spend down your assets the remaining balance in an account can come up woefully short of your intended gift.
Remember that your named trustee or your executor is a fiduciary. As such, he or she is required to carry out your wishes as you have written in your document. Even if you say it should be changed to something else—let’s say on one of your last days—the fiduciary’s responsibility is to follow the document.
If this seems a bit overwhelming even for the most committed organizer, reach out to your financial advisor. He or she can often tame what seems to be the chaos of forms and old paperwork to tell you what you have said, who gets what, and how it should all be distributed.
For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice.