Post A WEEK 2011 | Wordpress Challenge

Posted: 26 Jan 2011 09:11 AM PST

This is a guest post from Evan of My Journey to Millions.

Like life insurance, someone’s Last Will and Testament is often forgotten about for years. The documents are relegated to the back of the filing cabinet only to see the light of day after something horrible has happened. If I had to give a guess as to why, it probably has to do with the fact that those two items do not effect your day to day life such as over paying for your car insurance or having high interest credit card debt.

Part of every person’s financial review should be a re-reading of their Last Will and Testament. While I may read 4 to 8 Wills a week I can understand why reading one’s own will is not an enjoyable experience. First of all they are usually written in a foreign language known often referred to as legalese, but more importantly it forces you to think about your death and possibly your family’s death. While I can’t make the experience a better one, I can at least provide you withquestions to think about when you are reviewing your Last Will and Testament.

This post is part of the 2011 Spring Cleaning Week!

Reasons to Review Your Last Will and Testament

While the main stream media floods you with confusing information regarding the tax changes in 2011 most of the estate provisions are inapplicable to 99% of the Country! Notwithstanding that only about 2% of the Country did pay Estate Taxes and now only about 1% will there are some older Wills which might force surviving spouses to take advantage of certain tax provisions that are no longer applicable. So while you most likely don’t have to worry about it you should be on the look out for terms like “Credit Shelter Trust” when you aren’t worth $5,000,000+! With that out of the way lets get to the real issues which will effect 100% of all Readers.

Let’s attack the main reason why anyone creates a Will in the first place – To make sure the Will still follows your testamentary intent as it relates to the ultimate distribution of your assets.

1. Maybe you left assets to your children outright (rather than in Trust) but they are in the middle of a terrible marriage and might get divorced eventually hence possibly subjecting your future inheritance to possibly being split?
2. Maybe you just don’t like your spouse and want his share to be placed in a marital trust to restrict access and control?
3. Are there any charities you have grown fond of since your last drafting?

The next thing to think about and look for is if your family dynamics have changed.

1. Were you married when the Will was written? If so, I bet it should be updated (some States actually deem the divorced spouse to have predeceased but it is still a good idea to have a new one drafted).
2. Are any of your beneficiaries on or may need government benefits? Then their eventual share may need to be put in a special needs trust.
3. Are there grandchildren you want to direct assets to directly?

Another item to think about is whether you have the same people in your life. When you create your last Will and Testament you put certain people in charge of certain aspects of your life.

1. When you created your Will you named a person you want handling your financial affairs after you die but before they are distributed (The Executor). Is the named person still who you want in charge?
2. You also named a Guardian to care for your person and property. Do you want the same guardian to care for your children?
3. Lastly you may have named a Trustee to control Trusts created within the Will. Is that person still in your life? and Responsible?

While reviewing your Last Will and Testament may not be pleasant, it has to be done. Remember, you are checking to see if your testamentary intent is still met, whether the changes in your family dynamics still work with your Will and whether those people you put in charge are still those people you want running your estate after you pass.

This is a guest post from Evan of My Journey to Millions. Evan is a fellow personal finance blogger, who is also an Attorney and works as a Director with a New York Financial and Estate Planning Firm. If you like what you see here, please consider subscribing to his RSS feed or following him on Twitter.

Reviewing Your Last Will & Testament from personal finance blog Bargaineering.com.

Posted: 26 Jan 2011 04:09 AM PST

A few years ago, I had two banker’s boxes full of financial documents I just accumulated over time. Then, one day, I decided I would go through all those documents and actually decide whether I should keep, scan, or shred them. I purchased a Fujitsu ScanSnap S300 to scan any important documents and then some random crosscut shredder from Staples to shred the non-essential documents. Two bags of recycling later, I had rid my life of years of credit card and bank statements I’d never need and put all my important documents in a secure folder on my computer.

Here was my approach:

This post is part of the 2011 Spring Cleaning Week!

Keep These Documents

For the documents listed below, you want to keep the original in a safe place, be it a safe deposit box or just a safe place in your home; and protected. You should also scan these so you have a backup in case something happens to the originals.

1. Any government issued official document – Social security cards, birth certificate, passports, etc.
2. Titles – Titles of ownership to your car, home, etc.
3. Insurance policies
4. Tax returns – keep these for seven years, longer if you filed a fraudulent return. Keep the documentation that supports your tax return for seven years as well (like receipts for donations).
5. IRA contribution records – You’ll want to keep these forever as they are proof of contributions.
6. Any warranties or guarantees – You’ll want to keep these for as long as the own the item warranties/guaranteed.

Scan These Documents

These are documents where you want to keep them but the original has no added importance.

1. Brokerage statements – Keep a copy of statements for tax purposes (to prove cost basis and capital gains), you can shred the rest.
2. Big Ticket Purchase Receipts – For insurance purposes, keep a copy of the receipts from purchases you’d claim on an insurance claim should something happen. Keep receipts for purchases like televisions, jewelry, and other expensive items, shred the rest.
3. Home improvements – Keep records of any improvements to your home for tax basis purposes when you sell.
4. Pay stubs – You can scan these and keep them until you receive you W-2.
5. Medical bills – Scan and keep these in case you have a dispute or they support a tax deduction, otherwise shred.

Shred These Documents

You don’t need to keep these documents past the last one you received and in most cases they are available online. In fact, I’d recommend that you sign up for paperless statements whenever possible (to reduce fraud) and just review them online.

1. Bank and credit card statements – Review them for any erroneous charges or signs of fraud, then shred them.
2. Bills – Review for accuracy and then you can shred them.

Once you go through your old documents, it’s important to have a system for any new ones. In general, I let financial documents accumulate into a pile and then I batch file/scan/shred them. I don’t deal with each piece as it comes in unless it’s a clear “shred” item like a credit card statement (I use paperless statements so that’s a bad example for me). I prefer dealing with it in batches because it’s easier for me but you can do it however you like.

Financial Documents: Keep, Scan or Shred? from personal finance blog Bargaineering.com.