Here we are. The last few weeks of 2019, and the new decade is right around the corner. Do you have anything new and exciting coming up in 2020? Often, the start of a new year brings with it some big changes. What about changes in your work life? Are you starting a new job? Getting a promotion? Thinking of going back to school?
Your Work is a Big Part Of Your Life
On average, people spend about a quarter of their lives at work. For someplace we spend so much of our time, changes in our jobs can cause enormous ripple effects in our lives. However, there are some impacts of starting a new job that often go overlooked. Of course, we are talking about estate planning. We've written before about the list of triggers that signal the time to revisit your estate plan. The most common reasons why people go back and look at their estate plan are the birth of a child, marriage, and the purchase of a first home. However, estate plans are truly meant to be living documents. They are designed to adapt, grow, and change alongside you throughout your lifetime. An outdated estate plan may end up having the same effect as no estate plan at all. That's why it's important to revisit your plan even after the first “big three” events (marriage, birth of a child, and purchasing of a house). Changes in work can impact your income, debt, and assets such as investments and real estate. You may be considering a move or selling your home. All of these changes can have a huge impact on how your estate plan operates.
Let Your New Job Help You Start Fresh
Starting a new job, getting a promotion, or even choosing to go back to school are all great times to revisit your estate plan. If you don't have an estate plan at all, then these are especially good times to get started. Why? Because your financial life is about to change, and it's important that your estate plan reflects your income, debts, and assets accurately.
Let this big change in your work life operate as a reset button. Take this opportunity to sit down and really consider what you want to happen if you should become incapacitated or when you pass. It's not a comfortable exercise, but it is incredibly important to protect your loved ones and preserve your assets for future generations. Consider who will care for any minor children you may have and how your loved ones will be financially supported. What will happen to any real estate you own? Who has a say in your medical, financial, and legal affairs? How will your debts impact your loved ones and your legacy? A comprehensive estate plan takes all of these, and much more, into consideration and makes sure that your wishes are carried out, even if you aren't there to make them known.
Don't Let the New Job Paperwork Keep You From Paying Attention
When you start a new job, there will inevitably be a lot of paperwork. There may be some temptation to rush through it, so you can get to the business of actually working. However, all that paperwork actually will have huge impacts on your life in the future, and they should be carefully reviewed. If you aren't paying attention, it can be easy to overlook differences in your old employment benefits and your new ones, resulting in some costly errors.
For example, when you leave one job and start another, you may be switching 401(k) accounts. You may decide to roll your old account over into an IRA to simplify matters, or you can choose to convert your old 401(k) into a Roth IRA. If you choose the latter option, you will owe income tax on the funds you convert in that year. However, when it comes time to withdraw in retirement, you will be able to do so tax-free.
Regardless of how you choose to handle your retirement accounts, it is essential that you pay particular attention to your beneficiary designations. Beneficiary designations are the forms that you fill out when opening a financial asset (such as a retirement account, insurance policy, and investment account). The person you list here on your beneficiary designation to benefit from your assets when you're gone is incredibly important because, despite what you write in your Will or Trust, the beneficiary designation will control. At The Tyra Law Firm, we recommend that you revisit all of your assets' beneficiary designations about every three years. However, very few people actually do this. All too often, we have seen old 401(k)s, insurance policies, and other assets go to the wrong person because of a failure to update these simple designations.
You Don't Have to Take a Personal Day to Sort Out Your Personal Affairs
The most common excuse we hear from people who have not yet created an estate plan or who haven't updated theirs in a long time is “I just don't have time.” As you start a new position in the new year, it can seem harder than ever to fit everything in. However, committing to the maintenance of your estate plan doesn't require taking a day off from work and coming downtown. In fact, at The Tyra Law Firm, our top priority is your convenience. That's why we offer virtual office visits over the phone or video conference, and we adapt to any schedule. Need to meet at night or on the weekend? No problem! We are here to work with you whenever fits in your busy schedule. We also do all we can to make the process painless for you. Don't worry about getting everything organized before giving us a call, that's what we are here for! We will help you sort through your assets, get organized, and create an estate plan that is specially tailored to suit your needs. If you are ready to get started, give our office a call at (301) 315-0811.