Take Back Control of Your Financial Health in 5 Steps Generally, in a relationship relationship, one of the partners handles most of the financial planning and money issues. But what happens when the spouse who managed the couple’s assets and finances is no longer the decision maker? The less experienced spouse has to step up and take control. As this transfer of responsibility is often occasioned by death, disability or divorce, it is very stressful. Yet critical decisions concerning investments, insurance, financial and estate planning need to be made to avoid financial hardships later. Here are some guidelines to help a novice get up to speed. Putting your financial life in order is essentially a five-step process: • Determine your financial and estate planning objectives; • Evaluate the continued viability of any plans in place; • Understand the options available to achieve your goals; • Formulate a plan to achieve your goals; and • Implement that plan. WHAT DO YOU HAVE? Make an asset and plan inventory, securing existing papers that provide the information you need. These documents fall into two groups: 1. Financial documents—tax returns, bank/brokerage statements, credit card statements, mortgages, insurance, retirement accounts/benefits (IRA, 401k, pension), etc., listing your assets and liabilities. 2. Legal documents—your will, POA, health care proxy and trust agreements that name you as a beneficiary or trustee. Both types of documents embody your estate and financial plans. For example, beneficiaries can be named in trust agreements and your will. But they may also be named in beneficiary designation forms for retirement plans and other benefits, as well as banks, brokers and insurance policies. These designations are as binding as your will and override your will as far as this particular asset is concerned. Once completed you have a full list of your assets, and how these assets will pass at your death. KI
MAKE ADJUSTMENTS The next steps involve deciding whether the plan in place still makes sense and, if not, implementing needed changes. Consider: • Reevaluation of income needs and investment goals to ensure that your current portfolio meets the needs of your new circumstances. For example, if you were not the primary income producer, you may want to adjust your investments to generate more income. Your investment mix may require rearranging to meet your future needs. • Reviewing beneficiary designations in wills, trusts, bank accounts, retirement accounts and insurance policies. If your spouse was named, update the beneficiary forms. The same applies to designations for executors, guardians and trustees. Health care proxies and durable powers of attorney also may have to be updated. • If you are now on your own, use of a living trust with a professional trustee such as Garden State Trust Company to manage assets during your lifetime and to ensure that they are distributed pursuant to your wishes. Children and grandchildren as beneficiaries may become more important in your planning. Issues that arise here include: • Whether a program of lifetime gifts makes sense as it provides money for education, home purchase, etc. • Do you need a trust to provide for special needs children or minor children? • Naming children as your IRA beneficiaries so as to extend the payout period over their life expectancies, avoiding income tax liability at death. DON’T GO IT ALONE Once you have reviewed your current plans and the documents are in place, and you have considered issues and your options, you can make informed decisions about a new plan tailored for your circumstances. Throughout this process it is important to obtain professional guidance as you chart your course. Garden State Trust Company can offer you guidance on a wide range of investment, retirement and estate planning needs.
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The County Woman Magazine
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Barbara Kannheiser Being a Principal and Chief Operating Ofﬁcer of a truly independent trust company, Garden State Trust Company, we believe we have differentiated ourselves from other Trust Service providers, not only by the quality of the services we provide, but by the highest standards, the uncompromising principles and character of the people who deliver these services. July/August 2017
Published on Jun 29, 2017
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