By Michael Babikian January 8, 2019
I can’t help but
get sentimental when another year comes to a close. I think about how much my
kids have grown and how much has changed over the last 12 months. I also think
about the legacy I plan to leave behind (but not for some time, I hope). Of
course, I want to make sure my kids are financially secure, but I also want
them to carry on our tradition of making my grandmother’s cookies during the
holidays. I want them to remember all of our time and trips — the memories
we’ve made together.
In order for this
to happen, I have to make sure I’m organized. So, I created a list of five
things I check at the beginning of every year to help ensure that my legacy
still aligns with my life in its current state. I’m sharing it with you in
hopes that it can do the same for you and your clients.
- Check beneficiary
designations.
Beneficiary
designations are an important piece of your legacy. That’s because any account
or policy that has a beneficiary on it is protected from probate. These assets
go directly into the hands of whomever you designate. Check life insurance
policies, brokerage accounts and 401(k)s to see if the primary and secondary
beneficiaries are still who they should be. Did you know you can list
beneficiaries on your checking and savings accounts as well? It’s called
something different — a payable on death — but it bypasses probate just the
same.
- See if your will and trust
need to be updated.
Maybe you’ve had
another child or grandchild. Maybe you recently were married or divorced. All
sorts of life events can affect your will and trust, and you want to think
about your instructions for the disbursement of your belongings. Is there any
reason you’d want to reallocate your assets or designate new trustees or
beneficiaries?
- Inventory assets – both
financial and personal.
The first time you
do this, it’s a daunting task. But keep in mind that you don’t have to get it
done in one day. Start a list and when something comes to mind, make a note to
include it and describe where it’s located. Be sure to include photo albums,
family stories and traditions, and recipes.
In addition to your
primary financial assets, you’ll also want to include anything you wrote or
created, apps, money in your PayPal or Venmo account, Amazon movies, iTunes
—digital assets that are easy to overlook. Once you’ve done the heavy lifting
of creating an inventory of all your belongings, updating it each year is
pretty painless.
- Make sure account usernames
and passwords are up to date.
Not only will this
give your brain a break from remembering which password you used for which
account, it will also help your family access your accounts if something
happens to you. In absence of this guide, your family will need to work
directly with each company, which is far more time-consuming — in some cases,
company privacy policies will restrict access and lock out your next of kin.
- Check durable power of
attorney and health care proxy.
Many people
designate their spouses as their power of attorney, health care proxy or both.
It makes sense — you share your life with this person, and there’s inherent
trust. However, should you get divorced, it becomes imperative that you
immediately appoint a new POA and health care proxy. Even relatives fall out of
favor with one another, so it’s important to make sure that the person who
wields this authority is someone you trust now.
Michael Babikian is
founder and CEO of LegacyShield. He may be contacted
at michael.babikian@innfeedback.com.
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