Spring is in the air and that means it’s spring-cleaning time. Shake out the rugs, clean out the cupboards, refresh your flower bed, and get your legal and financial affairs in order.
For plenty of folks, it’s easy to know what to do when it comes to home organization, but the idea of legal and financial ordering can be complex and confusing.
Hopefully this article will give you a few places to start.
Review your beneficiary resignations. Request a review of your beneficiary designation forms from your life insurance account and retirement account custodians. Does it name a previous spouse? Someone that has passed away? Make sure they are current and have a contingent person named.
Also consider your bank accounts, they can be payable on death. This can help avoid a court-ordered probate, but make sure they designate your preferred beneficiary. Consider designating your life insurance, retirement and bank accounts to be distributed to a trust for the benefit of your heirs, providing court and creditor protection, and ensuring your children do not inherit money before they are properly prepared. Update your personal inventory. Create an inventory of your assets. Make a list of all you have and how to access each item.
Do you need a login, or is it in a safe deposit box? Put details on the list. Does the asset have a designated beneficiary? Is the account jointly owned with your spouse or a child?
I encourage my clients to prepare an inventory, where you document the assets that you own so that in the event you become incapacitated or when you die, your family will know how to find what you own.
Without an updated inventory, your assets could be lost to the state department of unclaimed property.
Texas currently has $7 billion of assets in its state department of unclaimed property because most people do not leave a clear record of their assets at the time of their incapacity or death.
It is not that we cannot determine who should inherit assets, the hard part can be finding assets that do not have a paper trail. Oil and gas interests that do pay every month is my most recent example. Consider if you need to name new guardians (long or short-term). Review your guardian nomination designations for minor children or special needs adults in your care.
Have you named guardians for both the short-term (local) and the long-term (people you would trust to raise your kids fully)? If so, do they need to be changed? Is there anyone you would wish to exclude?
Check out the title to your house. If you have a revocable living trust, make sure you as the trustee are listed as the owner on the deed.
If you see your personal name on the deed and there is not a trust listed, you can be sure that would result in your house having to go through the court process of probate in the event of your death.
For individuals without a trust there is a useful tool, called a Transfer on Death Deed which is revocable, but can transfer your property to beneficiaries upon your death. This operates similarly to a POD or TOD account at your financial institution.
Consider your agents. Who is named as your agent under your durable power of attorney? Do you have a power of attorney in the event of incapacity? Who is named to make medical decisions in the event of an accident or incapacity?
These are important people in your life, so the choices should be carefully considered.
Having documents in place in the event of an accident or incapacity is crucial. Everything is fine when you go to the emergency room and can tell the medical team who your spouse is, but that medical power of attorney is important if you are not able to let them know who is to act on your behalf.
Get your housekeeping started today.
This article is a service of the Law Office of Lasca A. Arnold, PLLC.
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