Personal Finance Exercises for the New Year, Part V
We believe that the most successful people are on top of the issues of the day. Being well-informed and staying well-organized will help you to succeed, so for the next few weeks we will be outlining six exercises for you to stay informed and ready to make good decisions. Those six exercises are:
- Making a calculation of your net worth
- Taking inventory of financial assets
- Understanding your cash flow projections
- Examining your expenses
- Making sure you have an updated estate plan and living trust
- Taking stock of all insurance policies – health, life, long term care, annuities, etc.
Four weeks ago, we took less than an hour to calculate your net worth. Three weeks ago, we talked about taking inventory of your assets. Two weeks ago, we figured out how to understand your cash flow projections. Last week, we looked at your expenses. If you missed any of these exercises, please go back and listen to those previous podcasts for more detailed information, or you can read the summaries of each exercise on our blog.
This week, we are making sure that we have an updated estate plan and living trust. About 80% of Fabian Wealth Strategies’ clients have an estate plan, will or living trust of some kind, but many haven’t looked at them in years. A living trust is what we encourage all of our clients to invest in. Without a living trust, all of your assets are frozen and subject to court order if something should happen to you. Here in California, if you have a million-dollar (gross value) estate, the minimum cost of your probate would be $47,000. Revocable living trusts can be changed at any time, but it keeps a judge from determining what happens to your assets if you are unable to do so.
But you have to make sure that all assets, all stocks, bonds, properties, etc are included in your living trust, or else those assets will end up going to probate. Remember that you can stipulate who is to be the guardian for your minor children, medical power of attorney, gifts to organizations or individuals and much more in this document. You need to pay attention to these details in order to protect those you love, and this is a very important personal finance exercise. We have a trust attorney that we recommend for our clients, so if you’re interested in having his contact information, please send us an email here.
All of these exercises are relatively easy, and you need to start the new year off right by looking at this. Again, if you need guidance on what needs to be held or bought, how this inventory works and our advice for your assets, don’t hesitate to get in touch with us at 888-300-3684.
Once you know what you have to can set clear, reachable goals. Tune in next week for more on Doug Fabian’s Monday Market Update, and the next exercise to preparing yourself for a successful investment future. (Also, if you read this blog and enjoyed it, listen to Doug’s podcast this week for even more details on these topics, and please share this information with others who might benefit from our perspective.)
