6 New Year’s Resolutions for Your Wealth Plan

It’s 2022 and we’ve made it through another year of the pandemic and a sea of uncertainty with tax laws and the economy. With every new year comes the inclination of many to start a list of New Year’s resolutions, and while most typically center around health and self-improvement, perhaps it’s also important to make a resolution about your financial health. This is the ideal time to make sure your wealth plan is in order and ready to withstand whatever may come this year and beyond.

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To help you with this important resolution, here are the top six things you can do to keep your plan current and healthy:

1. Update your financial plan

Did you have any changes in your life last year that altered either your income inflow or expense outflow? Perhaps you got a new job, moved to a new home in another state, sold a business or made some great investments (or maybe some not so great investments). Have your assumption and expectation horizons changed? Perhaps you’re planning to retire earlier, or now feeling better about the economic outlook so that you’d like to make some adjustments to your portfolio and return assumptions.

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A good and accurate financial plan should evolve along with you and, if needed, be adjusted annually.

2. Update your will and confirm your fiduciary choices

The pandemic has caused many to evaluate their lives and relationships. Is your will up to date? Are your assets left to the people of your choice, and are they receiving those assets the right way? Are they ready for the money and responsibilities now, or would they benefit from a longer-term trust? Are the people or institutions named to serve as your executor and trustee the best choices for your family right now? Do you even know what your will says?

It’s hard to believe, but many clients who’ve created a will in years past can’t even recall what was drafted. And this includes successful individuals running major business operations. They can tell you everything about their business finances but aren’t certain what they’ve done with their estate planning documents. If that sounds familiar, priorities should probably be realigned.

3. Update your ancillary documents

Your other important legal documents include your power of attorney, health care proxy and living will. Again, the people in your lives may not be the same as they were a year ago. Sadly, many of our loved ones have experienced health issues and may no longer be able or willing to serve as your agent of choice.

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Make sure those who you trust to act on your behalf if you become incapacitated are ready, willing and able to take on that responsibility should the need come.

4. Ensure proper titling of assets

This one gets missed often. You may have a beautifully written will, and you may even know what it says, but are your assets titled consistently with your plan and in a way that will take advantage of available planning opportunities? Are accounts held in your individual name or in joint name? Is that right? Should your assets be held in a trust or a family entity, such as a family limited partnership or LLC?

Consult with your wealth adviser to be sure you are making the most of your planning and tax-minimization opportunities.

5. Confirm beneficiary designations

For nonprobate assets, such as retirement accounts or life insurance, do you have the right beneficiaries named in the controlling documents? If you had a new child or grandchild this year, is this new love of your life added as one of your beneficiaries? Remember, these assets pass outside of your will, so while you may have updated your will, it doesn’t mean you’re finished with updating your entire plan.

6. Re-evaluate life insurance needs

The pandemic has showed us that no one is immortal. Do you need life insurance? If so, what is the proper amount of coverage? If you have an existing policy, is it still sufficient and performing properly? Is that existing policy held in trust? If so, is the trustee following all the necessary steps to administer that trust properly? Your advisers can help you evaluate the level of coverage you currently have and determine if it’s working in tandem with your overall plan.

To paraphrase Benjamin Franklin, failing to plan is planning to fail. As the world slowly recovers, it’s easy to begin to feel a sense of optimism again and to forget about taking care of your financial health. Make it your New Year’s resolution to review these top six important planning items so that you can feel confident you are starting off the year with a healthy and strong wealth plan.

Disclaimer

Wilmington Trust is a registered service mark used in connection with various fiduciary and non-fiduciary services offered by certain subsidiaries of M&T Bank Corporation.

Disclaimer

This article is for informational purposes only and is not intended as an offer or solicitation for the sale of any financial product or service or as a determination that any investment strategy is suitable for a specific investor. Investors should seek financial advice regarding the suitability of any investment strategy based on their objectives, financial situations, and particular needs. This article is not designed or intended to provide financial, tax, legal, accounting, or other professional advice since such advice always requires consideration of individual circumstances. If professional advice is needed, the services of a professional advisor should be sought.

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Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Alvina Lo serves as Head of Advice, Planning and Fiduciary Services for BNY Wealth. In this role, she leads the strategic direction, oversight and delivery of BNY Wealth’s advice planning advisory practice and fiduciary services. Alvina has 20-plus years of experience advising high-net-worth individuals and families, family offices, business owners and charitable organizations. Prior to joining BNY, she served as Chief Wealth Strategist for Wilmington Trust, where she was responsible for wealth planning, family office services and thought leadership development.