Today, let’s define and protect your a$$ets 🙂 Those pesky little details are enough to drive us crazy sometimes! Assets, policies and beneficiaries – oh my! When the topic of life planning comes up, there are two aspects to discuss. What you have and how you designate a beneficiary (who receives it later).
Asset Defined
What is an asset? The financial dictionary defines asset this way: An item or property which is owned by a business or individual and which has a money value.
Assets are of three main types:
- physical assets such as plant and equipment, land, consumer durables (cars, etc.);
- financial assets such as currency, bank deposits, stocks and shares;
- intangible assets, such as BRANDS. Alternatively, assets can be classified into FIXED ASSETS (those intended for long-term use by a business); and CURRENT ASSETS (those intended to be turned over, in trading, as raw materials are converted into finished goods, then sold to generate cash). See INVESTMENT, LIQUIDITY, BALANCE SHEET, LIABILITY.
We accumulate lots throughout life. The tangible and intangible assets, yes; also things that hold sentimental value. Let’s focus on the tangible and intangible assets today and who you’d like to have your assets after you’ve gone. ** This is the area often overlooked. If we haven’t properly documented who gets what – it can get messy 🙁
When we acquire assets, open certain accounts or policies; we are asked to name a beneficiary. We designate a beneficiary to take over or inherit the asset after we’ve gone, i.e bank accounts, investment accounts, retirement accounts, disability and life insurance, annuities, cryptocurrency, intellectual property or businesses.
Beneficiaries
Naming a beneficiary is an “easy process” in theory. We select a person or an entity when we open an account or start a job with benefits. It is our job to make sure the beneficiary designations are properly completed, reviewed for current day accuracy and according to your wishes to ensure assets are set-up to transfer easily. Check on the tax implications for your designations every few years as the federal, national and state laws change that may impact your original intention.
It’s also important to review policies naming beneficiaries if your relationship status changes. I’ve seen the negative impact of “unintended consequences” for so many who do not legally have access to assets they presumed they would. Blended families, those who haven’t looked for years at who their designee is and those designees who have pre-deceased you should review beneficiaries immediately.
Benefits
If you have benefits with an employer, it’s important to ask if the benefits are transferrable, if you change or leave the position from the employer. For example ask about any short and/or long-term disability insurance policies, life insurance and health benefits you have with an employer. They may only be in effect if you are employed by the employer who provided the benefit.
When my division of UA closed after 9/11, I no longer qualified for the benefits offered by UA. The policies were not transferrable to me, and it was up to me to secure my own policies, if I wanted to continue with disability, life and health policies. This impacted my well-being and my budget. It is often a surprise to discover how much those policies cost as “individuals”.
If you would like to review your beneficiaries to ensure everything is up to date and as you wish, let’s talk. Email me with questions/comments: Lynn@thelivingplanner.com. For additional information my work, check out my website: https://thelivingplanner.com
Stay well –Lynn
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