January 16, 2025

Many of us are unable to spend as much time outdoors as we would like in the coldest part of winter.  What better time, then, to give some consideration to concerns that are all too easily set aside during the more pleasant months?  It might also be a good reason to put the streaming service - that great time drain many of us know - on hold for a change.

In our December newsletter, we pointed out some year-end tax considerations.  We also made note of a few other issues in the newsletter that you might want to consider, which fit perfectly into this reflective winter-time theme.  The following are some things to consider; you may check the box on several and move on, but there may be one or two where you can make a personal note to dig into in more detail:

1. Review your portfolio – The end of the year is a perfect time to analyze your holdings and determine if the risk tolerances and asset allocations are still appropriate for your investment objectives. Consider your age, health, and family issues. This may be something you can do on your own if you are comfortable.  If not, contact your investment advisor (or consider getting an investment advisor).
2. Retirement planning - It is always good to take some time to reflect on your retirement strategy at just about any age, but you should be getting much more granular with your analysis if retirement is nearing, say if you plan to retire in 10 or fewer years. Develop a plan for the annual cash needs in retirement, make some estimates on the amount of income you will have, determine a strategy for drawing down retirement dollars, consider health insurance coverage, when you will draw social security, etc.
3. Review beneficiary designations – Review the beneficiaries named on retirement accounts or insurance policies; consider if assets are titled correctly; determine if a family member should be added as a signer on an account.  Also consider bank accounts; make sure someone has access to the funds if you are incapacitated.
4. Wills and Trusts -  If you have not set up wills and trusts, then contact your attorney; call us if you need a reference. If it has been many years since you had your wills and trusts drafted, set up a meeting with your attorney or CPA to review the documents, including the named beneficiaries, guardians, and executors.
5. Estate planning – The amount of an individual’s estate that is exempt from estate taxes in 2024 is $13.61 million (double that amount for a married couple). $13.990 million is the exemption amount for 2025 per person.  States, like Illinois, may have lower thresholds for the amounts that are subject to state inheritance taxes. Planning is required to make sure that your estate is optimally situated for estate tax purposes. While this is a generous amount historically, many individuals are surprised how close they may be coming to the limit when they total the fair market value of all of their assets.
6. Grantor (“Living”) trusts – If you have substantial assets, you should consider creating a grantor (also known as living or revocable) trust. If you have a grantor trust, be sure that all assets are held in that trust; brokerage accounts should be titled in the name of the trust.  Grantor trusts are not needed in every situation, so talk to a trusted attorney to see what is right for your situation.
7. Power of Attorney - As part of the review of wills and trusts, also consider powers-of-attorney and health care powers-of-attorney you have in force (or should have in force) for all of your family members. 
8. Insurance  - Review the various types of insurance coverages you have in place and re-examine your needs. This includes homeowner’s, auto, life, health, disability, umbrella liability, and long-term care. The coverage amounts change as we move through life events.  For instance, typically less life insurance is needed once the children are on their own, or when the mortgage is paid off.   
9. Family meeting  – As we age, it becomes more rare when an entire family is able to gather at once.  Hopefully, you'll be lucky and have a fews days every years when everyone is together.  If not, getting family together virtually can be an option.  Whether your family is zooming or in-person, consider having a family meeting to give an overview of your investments and objectives, charitable giving strategies and desires, the location of key documents, and names of your key advisors (CPAs, attorneys, bankers, insurance agents, investment advisors, etc.). The more these issues are discussed in advance, the less confusion there will be at critical times, and your loved ones will have a better understanding of what will happen and what their roles will be.
10. Safe deposit box - Make a special point to visit your safe deposit box and inventory (and organize) the contents. Make sure your executor, spouse, or other key person knows where the key is kept.
11. Cyber Security – Many of us have been subject to some level of privacy violations. Consider if you should purchase personal identify theft protection. One good practice is to check once a year with the three major credit bureaus, where you can pull a credit report for free.
12. Passwords – The passwords to your critical accounts (bank, investments, insurance) should be someplace where they are accessible in the event of your illness or death. Your password list should include other accounts as well that are password protected (like phones, internet, email, etc.).

Hopefully, the above will give you a little inspiration for this winter.