No matter how much time and effort you put into financial planning, there is always another item on the to-do list, another concept to research, another change to be made in the budget.
Not only do regulations and tax laws change, but our career paths and income levels and personal lives change as well - and sometimes all at once! Nothing is constant. A new career, marriage, layoff, divorce, raise, child, medical problem, or inheritance and and often does require changes to your budget, insurance policy, estate plan, retirement contributions, and so on.
This is obvious I suppose, and should be expected. But it can still be a bit frustrating if you're a perfectionist (like me). Here is a list of things in my financial plan which are causing angst, despite the fact that I read and write about personal finance every single day:
- I feel guilty for spending so much money on shopping and restaurants.
- I worry about whether my tenant will pay rent on time or whether I'll have to dip into reserves to pay the mortgage.
- I struggle to get my vacant rental unit leased.
- I know I should have more cash reserves.
- I wonder whether I should be saving for future goals that I don't really have yet (new car, wedding, kids, vacations)
- I don't know what kind of monthly bonus I'll get, so budgeting is now and endless task.
- I'm dipping into savings to pay off my credit card again???
- I haven't reviewed my home insurance policy in awhile, and I have this nagging feeling that if something were to happen I wouldn't be covered. I assume auto is OK, and that the disability coverage I get through my company is sufficient...
- Surely I don't need a will or an estate plan...I'll do that after I'm married. But what if that never happens? I should at least update my beneficiaries and write up a holographic will...
- I should probably talk to a CPA about some tax planning...that's been on the to do list for awhile.
- I should do some research about putting my rentals into an LLC. Or getting an umbrella insurance policy. Or both.
8 comments:
Get the umbrella liability policy ASAP. One tenant-related lawsuit could wipe you out. Get coverage in the multiple millions - base it on what you think the largest liability award could be and what you think your net worth will be in 10 years. You want those insurance company attorneys defending you and their checkbook if you are sued.
About the will--if you don't do one, your parents will inherit from you. Is that really what you want? Aren't there siblings or charities that you would rather give to? You are young, and the most likely way you will die is in an car wreck. There's at least a 50% chance you won't be at fault which means there may be substantial wrongful death proceeds available to your estate.
Forget a "holographic" will, which, depending on your state either means a handwritten will or a will with your signature unwitnessed. There are plenty of free will forms online, some of them geared to your particular state. Use them. Filling in the blanks handwritten is fine. But be sure to have your signature (not the terms of the will itelf) witnessed by at least two people. In some states, it makes things easier down the road if the witnesses' signatures (NOT yours!) are notarized.
I just wanted you to know that I gave your blog an award, even though I only began reading it a short time ago. I enjoy reading it and that's the only requirement! :oD Come on over to see it.
Contact an experienced attorney who does estate work as a primary part of his/her practice in your state of residence, and also has been doing estate work for some time. You don't know what you don't know.
Have such an attorney draft a will according you your needs and desires. If you die with a messed up will, you won't get a second chance.
I don't really care about having a will yet - I have no dependents, and I don't feel like paying to set up my estate when the odds are that I'll marry in a few years and just have to pay again to re-do it all.
My investments and retirement plans all have beneficiaries (my siblings), and all my other assets will be split between my siblings and my parents according to Texas state law - which is perfectly fine with me. That's what I would instruct anyway.
@ Grace - holographic wills are perfectly acceptable in Texas, and they are frequently admitted even when written on napkins or post it notes! It's one of the few states left with such open holographic will allowances. They don't have to be witnessed. The very prominent estate planning attorney who was explaining this to my CFP class even admitted that in Texas you don't really even need to pay an attorney to draft a will if your requests are relatively simple and you think you can write them clearly (naturally it's usually worth it to do so since ideally you'll be setting up trusts and powers of attorney, etc as part of the plan).
Why don't you start just checking off one at a time :)
In order of importance.. like .. the most important umbrella liability?? for this month, another one for next month and so on..?
Meg-
Hey I read your blog all the time and love it.
I normally don't do this, but i'd love your advice on something. I posted an entry on my site about buying a condo and raiding some funds to do it... and i'd love your input... think you might be able to check it out? I've never bought a place so this will be my first purchase.
thanks
www.ambellamy-womaininred.blogspot.com
Post a Comment