Once the weather warms up, we throw open the windows and remember we should wash them. And the curtains, probably the floors, and the deck.

After the house is in order from a good spring cleaning, reviewing your financial “house” is also a perfect project for your list.

Thinking about your total financial picture can sometimes feel overwhelming and maybe even deter you from starting the review process. It may help to break this down into more manageable pieces.

First, let’s start with: What do you have? What might you owe? When we’ve answered those questions, you’ll not only have a financial review, but it can also serve as a personal net worth statement.

As you’re reviewing details about your accounts and assets, it’s best to have the most recent statements and information available.

Financial Review

List financial accounts in your name. Add these details to each entry on your list:

What type of account is it? (checking account, 401(k), IRA, after-tax investment account, etc.)

Whose name(s) are on the account? Are they individually owned or are they jointly held?

Where are they held? Are they at a local bank, a national bank, an investment firm, etc.?

What is the balance in the account as of the date of the statement?

What is your percentage mix of stocks, bonds, and cash? If you can delineate your mix of stocks, bonds, and cash by account, this would also be a great item to note.

List out all other assets you own such as a house, vehicles, life insurance, or other valuables or collections, etc. Include the following information for each asset:
Purchase date and price

Current estimated value

Current value

Is the asset insured? If so, at what replacement value?

Life insurance death benefit, premium amount, and cash value (if applicable)

List any liabilities such as a mortgage, a car loan, student debt, etc. Include these details for each:

Outstanding balance

Amount and frequency of payments

Interest rate

The above details are good to go review periodically, about once a year. Doing so will help you gauge how the value of your assets are changing over time. It can be refreshing to see nest eggs grow, liabilities decrease, and how you’re moving toward your financial goals.

During times of financial market volatility and stress, it is important to reassess your risk tolerance as well. If you were able to determine your mix of stocks, bonds, and cash, now is a good time to consider if your asset mix aligns with your risk tolerance.

Estate Plan Review

If something were to happen to you, having an estate plan may be a strong foundation to help your family preserve their inheritance and reduce risk.

The three main parts of an estate plan are a Will, a financial power of attorney document, and a health care power of attorney/living will.

1 – A Will is a document that becomes effective when you pass away. It dictates where your assets go upon your death and assigns someone that you trust to settle your affairs, also known as your executor. If you have minor children, a Will can also appoint guardians for your minor children.

It is important to review this document periodically in case you need to make adjustments, especially if there have been any major changes in your life.

Some assets may not be controlled by a Will, such as accounts with a beneficiary designation. These accounts include 401(k), IRA, Roth IRA, annuities, and life insurance to name a few. Jointly held property such as a joint with right of survivorship account is also not controlled by a Will. At the first joint holder’s death, the property will simply pass to the other. The surviving spouse’s Will would ultimately decide where those assets will go. Some jointly held assets could add a transfer-on-death designation.

2 – A financial power of attorney typically comes into play when one becomes incapacitated and unable to make decisions. It gives the power holder authority to perform financial transactions, in the event the owner is unable to do so. Because of the important role a financial power of attorney creates, this is another document you need to regularly review.

3 – A living will and a health care power of attorney: Similar to a Financial Power of Attorney, the health care Power of Attorney document names a power holder to make health care decisions for you in the event you are incapacitated. A Living Will simply states your desires in an end-of-life situation. These documents are also important to review periodically because they may greatly impact your quality of life.

One final spring cleaning item for your financial review is to update a list of professionals you work with on financial and related matters. This can include your attorney, tax accountant, insurance agent, and investment advisor. Keeping this list up-to-date and accessible for your loved ones can significantly reduce stress during a difficult time.

About Savant Wealth Management

Savant Wealth Management is a leading independent, nationally recognized, fee-only firm serving clients for over 30 years. As a trusted advisor, Savant Wealth Management offers investment management, financial planning, retirement plan and family office services to financially established individuals and institutions. Savant also offers corporate accounting, tax preparation, payroll and consulting through its affiliate, Savant Tax & Consulting.

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