It’s New Year’s resolutions time, an ideal opportunity to get our legal and financial houses in order. Here are some resolutions we can all accomplish.
Organization:
• Label and store all closed bank and financial accounts.
• Place an up-to-date summary of your family’s assets and debts in an assets file.
• List the address and phone number of each financial institution where you have an account, along with the name of any account representative.
• Assemble and sort all of the past year’s bills and receipts. You’ll need them at tax time.
Directions:
• Prepare a “Letter of Instructions,” to be read by your family in the event of your absence, disability or death. This letter should suggest priorities and should tell how to access money for emergencies. Indicate where your Will, Trust and other personal papers are located.
• Provide a list of names, addresses and phone numbers including your attorney, accountant, insurance and financial professionals and others who may offer information and assistance. Update your Will, Living Trust and other personal directives. If you don’t have a Trust or Will — shouldn’t you? A properly drafted Living Trust will insure that your wishes are carried out, avoid the time and hassle of probate and maybe save your family thousands of dollars in legal fees and Federal estate taxes. If you have a Living Trust, is it properly funded?
• Review title to your real estate and other assets. Does the current form of ownership of each asset best protect you from taxes, probate and creditors? If you are married, should you hold your home in as “husband and wife as community property with right of survivorship”?
• Compare your life insurance needs with your current policies. Life insurance may be useful not only to build estate, but also to replace the income of a deceased wage earner.
• Consider having an annual legal check-up with a qualified attorney.
• Survey current investment holdings and opportunities with a tax professional and a financial planner.
• If you own a business, ask your accountant whether it should be incorporated or held as an LLC?
A systematic review of your legal and financial status can be a most rewarding New Year’s project, promoting peace of mind and security for yourself and your loved ones.
Jerry Kessler practices law in Santa Clarita. You may call him at 661-255-1001.