End-of-Year Financial Tasks

There are some tasks that, left undone, can have an enormous impact on those you love. The end of the year is a good time to set some deadlines for yourself. Give yourself a December 31 deadline, and you’ll stay focused says The Daily Journal’s article “5 financial tasks you should tackle by year-end.”

Here’s the list to get you started:

Check Your Beneficiaries on All Accounts. A sad story comes from Washington state, where a man died two months after his divorce was finalized. He had not changed his beneficiaries, so all of his life insurance proceeds, and his pension plan went to his ex-wife, and not to his children from a prior marriage. The case went through the court system all the way up to the U.S. Supreme Court, which ruled in 2001 that the beneficiary designations had to be honored.

Start by making a list of your accounts, then check to see who your beneficiaries are. You may need to contact the custodian of the accounts, or you might be able to do it online. Ask for a confirmation in all cases, so you and your heirs will have it in writing.

Look at Any Pay-On-Death Designations. In some accounts, there is a pay-on-death designation, in place of a beneficiary designation. This also may have been an option that you chose when you first opened the account. Without a designation or Pay-On-Death name, the account must go through probate, the legal procedure to distribute property in your estate.

Depending on the state, you might have had this option on property or even vehicles. A local estate planning attorney will know if this is an option in your state. To add or change a beneficiary, you’ll need to apply for a certificate of car ownership with the beneficiary form. If you want to change your deed to a Transfer-on-Death deed, you will need to submit a new deed to the appropriate county recorder. Here again, an estate planning attorney will be able to help. The lawyer will also help evaluate whether this is a good way to transfer property in your situation.

Update Insurance Policies. The insurance company is not going to send a beneficiary a check, without someone filing a claim. The family often does not know what insurance policies exist. A 2013 investigation from Consumer Reports found nearly $1 billion in unclaimed life insurance proceeds. You want to update your contact information with the insurer every now and then, making sure that your beneficiaries are correct and that bills are being sent to the right address. In some cases, the insurance company allows people to notify another person, if payment is overdue and they are not able to reach you. You should also keep that contact information updated, in case your back-up person moves.

What’s In Your Safe Deposit Box? If it’s been a while since you’ve visited your safe deposit box, schedule a time to go and have a look. If you neglect to pay your annual fee, after a number of years the bank is legally permitted to open the box and turn its contents over to the state. Visit once a year to make sure payments and contact details are current. Leave clear instructions with your executor and heirs about where to find the box and its keys. Consider giving another family member official access to the box.

Revise Powers of Attorney. And if you don’t have power of attorney documents in place, make an appointment with your estate planning lawyer to have them created. If you can’t locate your original POA documents, or if the people you chose many years ago have died or moved away, it’s time for a new set. Spare your family the stress, lost time and unnecessary expenses, by having these updated and name a backup agent (or two).

Yes, there’s still enough time to get all these tasks done and enjoy the holiday season.

Reference: The Daily Journal (Nov. 18, 2019) “5 financial tasks you should tackle by year-end”