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Spring Cleaning Time is Here...

Posted by Team HFM on May 04, 2017

QUICK: Without looking it up, can you answer these 3 questions?

If I die in a sudden accident, who will get my money, my investments, my insurance policy payouts, etc?

If you can’t answer this one in detail from memory, you are not alone. – But do go and re-check both your will and designations of beneficiaries on all of your accounts.

Request help from your account manager or other professionals who established accounts for you.

The opening of a new account, a divorce, disability, disinheritance, death of a family member -- they all can affect what happens, in ways you may not have anticipated.  The big message here is:  “Naming the wrong people or failing to update documents can create a mess for your heirs” says Carolyn T. Geer in her Wall Street Journal article “Beware the Beneficiary Form”.   She introduces her practical guidance and cautionary tales about beneficiary designations with this:  “Think your estate planning is done once you've gone to the trouble of making a will? Think again. All your hard work can be undone with a stroke of a pen when you open a bank, brokerage or retirement account.”

Check too, your insurance policies, especially when divorce becomes part of the picture at any point.

In “Naming Beneficiaries Of Insurance Policies And Retirement Plans”, the authors “caution that when a divorce is involved, one must “carefully examine (i) the express language of the policy at issue, (ii) the divorce record, including the content of any divorce decree, as well as (iii) the law in the applicable jurisdiction.” (National Law Review, authors from Drinker Biddle & Reath LLP) 

Once my taxes are filed, how many years of tax returns and supporting records do I have saved?

Before you start digging, retrieve these guides from the IRS to keep in the vicinity of your tax files: 

https://www.irs.gov/uac/tips-for-managing-your-tax-records

https://www.irs.gov/businesses/small-businesses-self-employed/how-long-should-i-keep-records

Are you relying on someone else to keep those records for you? 

Although you filed your taxes with them, you can not rely on the IRS or your state department of revenue.   The onus is on you to be able to substantiate your filings down the road.   Also, be careful to understand what your accountant is doing for you in the way of record retention:  Just your returns? Supporting materials as well? For how long? What happens to your records if you cease to be a client or your accountant retires?

When did I last update what my financial adviser knows about my assets, my life events, and my objectives?

Don’t recall?

Time flies, and a full annual review at a minimum is what we advise. Like a visit with your doctor, the meeting can be more fruitful if you write down items you would like to discuss, or suggest agenda items in advance. 

A questionnaire can be sent to help prompt your thinking to prepare for the conversation, or can be used to let us know about shifts in your situation, if meeting is not possible at the moment.