Get Financial Documents in Order Before the Year Ends

Jackie Bedard
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Autumn is officially here, which means the end of the year is just around the corner. And before 2015 rolls in, it's a perfect time for you to take a look at your financial and estate plans to make sure they're in order.

Marriage. Children. Grandchildren. Divorce. Retirement. They're all milestones that call for adding or revising financial documents, and there's no time like the present.

First things first

Turning 18 is a first major life milestone for a client - or, more likely, a clients' child. Considered an adult in the eyes of the law, your child still likely needs your help, and there are documents he needs to make sure that happens, according to Bankrate.

A durable power of attorney will let you control his finances if he becomes incapacitated. A health care proxy can make medical decisions for him in the same situation. A living will lets him detail his wishes regarding life-sustaining medical treatment. And a HIPAA release lets you discuss his medical condition without violating patient privacy laws.

Moving in and up

If a single client met special someone and got engaged this year, it just makes sense that his financial cards are on the table. Prenuptial agreements aren't just for the rich and famous. Financial surprises - mostly the negative kind - after tying the knot are one big reason that Gordian Knot gets cut.

Before or just after a client gets married, he should have an experienced estate planning attorney update his will and other documents he signed when he was 18 so that his spouse can make decisions for him in an emergency. The health care proxy is especially important, Bankrate says, so a client doesn't end up in a situation like Terri Schiavo, who lived in a vegetative state for seven years while her husband and parents fought over her care.

Finally, update beneficiary designations on 401k plan or IRAs because they take legal precedence over whatever is written into a will or trust.

More life changes

Having a child or a new grandchild is another time to review financial documents. It's never too early to set up a college fund, such as a 529 plan, Wells Fargo says, so even modest amounts can grow over time.  Forbes recommends clients sign documents that specify guardians for the child if parents should die. Updating your will or setting up a trust for the child is also necessary when a child is born. 

As the family grows, clients might want to buy a larger home. Make sure he has enough life insurance to pay off the house - perhaps a special policy just for that - and help send his children to college. If he has a living trust, Forbes says, have the house held in the trust.

Marriages sometimes break. If a client one day divorces, a prenuptial agreement would cover assets brought into the marriage, but common assets will need to be divided and guardianship of a child will have to be worked out. Retirement plans will change, and beneficiary documents need to reflect the newly single status.

Finally, when a client is at retirement age - or, ideally, a decade before retirement - he needs to look at his life expectancy, expenses and income to determine an appropriate budget, Wells Fargo says. We want to make sure all those documents he signed when he was 18 are up to date, and meet with him periodically to ensure that his golden years retain their luster.

As an attorney, we can hold annual conversations with clients about unexpected life changes and how they affect planning and financial decisions. If we can ever help you with holding those discussions, please contact our office.

We hope this information was useful to you and helps you clients and your families. If you have a specific case or a question, don't hesitate to call our office at 919-443-3035.
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