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Four Things to Improve Your Financial Health in the New Year

Four Things to Improve Your Financial Health in the New Year

As you’re making (or already breaking!) your New Year’s resolutions, it’s a good time to consider some important planning strategies to ensure you and your family are in good shape for 2019. (No, this isn’t another article to encourage you to get in your 10,000 daily steps!)

When I think about the families I meet with as a financial planner, there is a often a recurring theme of important details that go overlooked. So, as you start this New Year, here are a four things to consider to ensure your financial health is in good shape.

[Related: What Women Breadwinners Need to Know About Wealth]

1) Check your beneficiaries on all your accounts.

Were you married or divorced in 2018? Did you have a child? Did you have a grandchild?

It is often not a person’s intent to leave an inheritance to an ex-spouse because they didn’t make a change to their beneficiary designations. It is also often not a person’s intent to leave an inheritance to two children, but exclude a third because they didn’t update their beneficiary designations.

No one expects to pass away with their primary beneficiary, but it can happen. Do you have contingents listed? Did you name a custodian for any minor children? Has anyone explained the difference between “per stirpes” and “per capita”?

2) Check your address.

If you moved in 2018, make sure you have updated your address on all your accounts. If you have e-delivery and changed your e-mail, make sure you have updated your e-mail address on all your accounts.

More and more people are utilizing e-delivery for bills and financial accounts. Most people don’t intend for their insurance to lapse, but they forget to pay it if they don’t receive the annual invoice.

If a financial institution cannot successfully deliver you a statement after three years of trying, your account is subject to being turned over to the Comptroller’s office. The State of Maryland alone has hundreds of thousands of records worth hundreds of millions of dollars in unclaimed property. Don’t let it be yours!

[Related: A Money Conversation Part 2: Getting It In Writing]

3) Estate planning.

So many people don’t consider the importance of having a Last Will and Testament until they are "old." In truth, it’s very important for everyone to have a Last Will and Testament. I know it isn’t “fun” to plan for death, but it’s important.

Each state has intestate succession laws guiding what will happen to a person’s assets if they die without a will. In Maryland, if you are married with minor children, half your estate would go to your spouse, while the other half would go to your children. If your children are adults, your spouse would inherit $15,000 and your children would inherit everything else. This is often not what a married couple would want to have happen in the event of a death.

Also, for those of you with children over 18, have you noticed that you can no longer help them with their medical care? Due to privacy laws, our children, who may still be on our health insurance policies, are adults and their health information is private. This can turn into a real challenge if your child is in college with a medical emergency five states away.

Having a Power of Attorney could help. Financial planners work closely with you and your estate planning attorney to help ensure these (and other) important details are addressed and planned for.

4) Life insurance.

What do you have and what do you need to protect your family? Ask your financial planner for an insurance needs analysis review. Figure out what you need to protect your family if something happens to you. Social security survivor benefits are often not enough to replace a lost salary, pay off a mortgage, or send kids to college.

I know, an inspiring article to encourage the 10,000 steps may be lighter reading. However, the weight of a mistake in one of these areas can be truly significant for your family. And, while it may not be “fun” stuff to do, you can have them all done before the end of the month and claim victory over a New Year’s resolution!

[Related: It's a Take-Charge Kind of Year]


Coleen Kramer Beal is the administrative manager and first point of contact for the Velnoskey Wealth Management Group at Janney Montgomery Scott, LLC.

Have more questions? Follow up with the expert herself.