“The end of the year is a good time to mark items off your financial checklist, like reviewing beneficiaries, updating contact information and visiting your safe deposit box.”
Sometimes, you can get away with procrastinating, but delaying some tasks could have a huge impact on loved ones. The Dallas Morning News’ recent article, “5 Money Tasks to Tackle by Year-End,” says that the end of the year is the time to set some firm deadlines to make certain that you won’t leave a financial mess for people you love, if you unexpectedly die or become incapacitated.
Consider putting these items on your to-do list with a December 31 deadline:
- Beneficiaries. You typically need to designate your beneficiaries when you sign up for a 401(k) or other retirement account, and beneficiaries are usually required when you buy annuities or life insurance. Make sure your beneficiaries are accurate. Sometimes you can review and change beneficiaries online, but some accounts and companies require you to call the company and request the appropriate form.
- Pay-on-death designations. You may not have been asked to name beneficiaries when you opened your checking account or a non-retirement investment account. However, many financial institutions offer a “pay on death” option, which lets you name a beneficiary who can receive the money directly. That way, the account doesn’t have to go through probate. There are some states that also have “transfer on death” options for vehicles and real estate, which let you pass property directly to heirs without the potential delays and costs of probate.
- Update insurers—and your heirs. Insurers won’t pay out life insurance proceeds, until someone files a claim. Frequently heirs don’t know that the policies exist. Updating your contact information with your insurer can help prevent policies from lapsing. Some insurance companies also let you name someone who can be notified, if a payment is overdue, or they can’t find you. You should also keep the contact information for those backup people updated with the company.
- Look at your safe deposit box. If you don’t pay your annual fee, and your bank can’t find you, after a few years, your safe deposit box will be opened, and the contents will be given to the state. Photos and documents could be thrown in the trash, and family heirlooms sold at auction. Check on your box once a year to make certain that your payments and contact details are current. Provide clear instructions for executor or heirs about where to find the box and its keys.
- Powers of attorney. These documents let others make financial and health care decisions for you, if you become incapacitated. If you don’t have them, or the designated people have died or are otherwise unavailable, your family may have to go to court. Avoid the expense, stress and delay, by naming a backup person and reviewing the documents every year to make sure the people named can still serve.
Reference: The Dallas Morning News (November 26, 2019) “5 Money Tasks to Tackle by Year-End”