Having your financial life organized can be a Zen-like experience.  You can almost see a calmness come over clients when they sit with you to review their newly prepared comprehensive Financial Plan.  Sure, there are usually many To Do’s and/or decisions that will still need to be made to optimize their financial future, but just having the roadmap in front of them is enlightening and uplifting.

I recently wrote about how a Financial Plan encompasses far more than just having an investment portfolio.  Today, I want to share a few of the typical Financial Plan To Do items you should accomplish to get your financial house more organized.

📜 Create or update your Estate Plan.  Estate plans are a multipart set of documents that will require your thoughtful input but are surprisingly inexpensive to have prepared by an experienced attorney.  Common elements include:

• A Will in which you will name both a Personal Representative (Executor) to handle your estate when you pass and, if appropriate, a legal guardian for any minor children.
• A Durable Power of Attorney, which will enable a named trusted individual to act on your behalf if you become unable to do so for yourself.
• Advance Medical Directives to indicate the type or level of medical care you wish, to whom your medical information can be shared and who can make medical decisions for you, if you are unable.
• A Letter of Instruction, which is a non-public complement to your Will.  With this you can provide instructions as to where to locate titles, investments, etc. and describe your final wishes to your Executor and family members.
• A Living Trust, which is one way of bypassing the complexities and time delays of your state’s probate process will allow your heirs to receive your bequests directly and more quickly.

👨‍👩‍👦 Name or update beneficiaries on all your financial accounts. Some individuals you previously named as beneficiaries may have since passed or are no longer appropriate choices to receive your assets.  Naming beneficiaries is another way of bypassing probate and/or directing assets to a Living or other type of Trust.

☂️ Check that your insurance coverage for health, life and property remains appropriate for you, your family and business.  And, of course, make sure the beneficiaries are up to date.

🗃️ Consider if your investment accounts are consolidated to the extent practicable and organized so that your Durable Power of Attorney or Executor can easily locate them when the time comes.  I have seen documents representing assets stored in the pages of books.  Don’t leave that treasure hunt for your heirs.

💰 Create or at least start to build a reserve or emergency fund.  I typically suggest three to six months of total living expenses be set aside and invested with short-term access in mind. Thus, when faced with job loss or other emergencies, you’re less likely to be forced to sell retirement investments at a loss.  A situation that can arise if your need happens to coincide with a time when stock and/or bond prices are falling.

 🤔You won’t find this on the To Do list, but I think “owning” your Plan and becoming knowledgeable about your financial future are among the most important things you can do to put your house in order and keep it that way.  For example, as your life and circumstances change, recognize that your Plan might also need to change, and reengage with your planner or other professional.  This is critically important because, when your life changes or just advances closer to your “investment horizon” (the time when you will start to need access to your savings) the composition of your investment portfolio usually needs to be adjusted.  Also, periodically, engage with your Estate Planning attorney to ensure your Estate documents remain compliant with current legal and tax regulations, especially important if you move to another state.  And finally, continue to educate yourself about financial matters affecting your personal financial health.

This all sounds like an exhausting project but much like the house you live in, you need to first secure it from the outside elements and, thereafter, keep it well maintained so you can feel comfortable that you’re safe within.