The Annual Review – Stepping Into 2018 


Ring out the old, ring in the new,

Ring, happy bells, across the snow:

The year is going, let him go;

Ring out the false, ring in the true.

– Lord Alfred Tennyson

Happy 2018! Now is a great time to do an annual review of your finances and estate planning. Here is your step-by-step guide.

Update your asset list.  Categorize each by type:  cash, stocks & bonds, life and long-term care insurance, annuities, real estate, art and collectibles, miscellaneous. Then further categorize them by how the asset is held: personally, LLC, family trust, inside an IRA, etc.

Update your debt list. Categorize each by type:  personal, corporate, contingent (such as a loan guarantee), etc. If the debt has an interest cost, then note the amount.

Update your income list. Include all sources:  social security, alimony, required mandatory withdrawals from your IRA or 401(k), loan repayments, pension, etc.

Update your annual budget. Use the information from the previous three documents.

Now take all of that information and update your financial plan. You will need to project out to some reasonable age – many experts use age 95 if you are in good health. This is also a good time to visit with your financial planner. Don’t have one? Start by looking for someone with a CFP (Certified Financial Planner) designation.

Next, review your Estate Planning documents. This is critical with the tax law changes. If you have a trust in place to avoid or minimize federal estate taxes (Texas does not have estate or inheritance taxes), then you should review it to make sure that you really need it, given the doubling of the federal estate, gift and generation skipping transfer tax exemptions. You should also make sure your trust has enough protections in place in case the Congress changes the estate taxes again – consider adding trust protectors and decanting language. For ancillary documents, Texas made sweeping changes to the durable power of attorney (financial), effective September 1, 2017, and mandated a new medical power of attorney form for use beginning January 1, 2018.

Communicate with your fiduciaries, your advisers and your heirs. For your fiduciaries (trust protector, trustee, agent, executor), you should meet at least annually. For your advisers (CPA, financial planner, attorney), the same holds true. You may even want to have a joint meeting. You will be amazed how easily things come together when everyone communicates.

For your heirs, your meeting should be appropriate for everyone’s age, position, relationship and health. If you are 57 and in great health, then your discussion will be different from the one that you will have when you are 97 and in declining health. It is best to introduce ideas slowly. Then let it drop – no-one wants to hear constantly about your inevitable demise.

Finally, clean out the clutter from your closets, your computer and your life.

Welcome to 2018!

Hammerle Finley Law Firm. Give us a call. We can help.

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The information contained in this article is general information only and does not constitute legal advice.