WEALTH INSIGHTS

Complete your personal financial planning with this to-do list

Financial homework: The basics you can organize from home

When crises occur, we're often stuck between reacting to what's taken place and trying to create a plan for how to move forward. My advice would be to use this time to get your finances in order and plan for the future as much as you can. Doing so will redirect your focus away from the global and U.S. economy — which you can't control — to personal financial planning, which you can.

Set new financial goals

Before you delve into financial planning or meet with a wealth advisor, try to revisit your financial goals first. Have you already achieved the financial goals you set five or 10 years ago? Whether you have or not, take time to consider what your financial objectives are. What do you want to accomplish? Who or what do you need to protect? Do you have the liquidity you need?

Next, consider your time frame for both long- and short-term goals. Your time horizon will greatly influence your alternatives and the urgency of your actions. Finally, remember to make SMART — specific, measurable, actionable, realistic and timely — goals. By doing so, you, an advisor or family member can ensure that you're remaining accountable.

Finalize your budget

Regardless of how detailed of a budget you create, the very act of creating one and understanding where your funds flow regularly is illuminating. Although it may feel a bit restrictive at times, having a basic personal budget to periodically reference can help you plan your resource allocations and reductions. According to Kiplinger's, many ultra-high net worth individuals underestimate what they spend by 25 percent. Reviewing your budget on a monthly basis would highlight the areas in which overspending occurs. You can then make the applicable adjustments.

Organize your philanthropic giving

Is philanthropy integral to your life or business? If you've taken a largely ad hoc view in your charitable work, now may be the time to be more purposeful or intentional. By pulling together the contribution records for all the foundations and organizations you regularly contribute to, you'll gain a better view of what your charitable goals are and what needs to be re-structured and/or revisited. Do your personal goals align with your philanthropic goals?

Establish or revisit your estate plan

When was the last time you reviewed your estate planning documents? If you have a Will but it was done when your now 18-year old was first born, it's time for an update. Other documents, such as your Durable Power of Attorney and Health Care Proxy, can also get "stale" and need to be refreshed periodically.

While you're reviewing your basic documents, consider whether or not a Trust may help you achieve certain objectives. I like to remind my clients that trusts are used in a variety of situations — not solely for estate planning purposes. If you need to strengthen your asset protection or strictly allocate certain resources, a trust or another vehicle may be well-suited. Speak with your attorney or trusted advisor for direction.

Compile your legal documents

If you're trying to get your finances in order, I would suggest ensuring that you keep all your essential legal documents in a central, yet secure, location. While many may keep their business documents in pristine order, sometimes their personal documents may need a bit more organizing. And if you have critical documentation in a bank safe deposit box or with your attorney, make sure that a trusted loved one has access to copies.

Make adjustments to your tax strategy

The downturn in the economy may have unrealized tax benefits. Now is the time to revisit your tax strategy and review your tax planning. It may make sense to sell a holding or asset to capture the loss , accelerate distributions from retirement accounts, consider Roth conversions, or adjust your quarterly estimated tax payments. Your tax attorney or CPA can assist you.

Check your insurance

If your situation has changed over the past year or more, you'll want your insurance to reflect those changes. Confirm that your insurance still provides sufficient assets and personal protection. Also, if the values of particular assets have changed, you may need to update the associated policies.

Umbrella liability insurance coverage is often overlooked and insufficient, leaving many high net worth individuals and families underinsured. Obtaining or increasing this coverage is usually very inexpensive and is well worth the additional cost, especially as many people are exposed to higher risk factors without even realizing it. For example, having a swimming pool, a dog, domestic staff, young drivers, or serving as a volunteer board member or trustee of a charitable organization can expose you to potential litigation.

Request a copy of your credit report

Did you know you are entitled to one free credit report from each of the three major credit reporting bureaus each year? It's important to review your credit report each year for accuracy, as errors can ultimately cost you a loan, result in higher interest rates or disqualify you from a job.

You may order a copy of your credit report online at https://www.annualcreditreport.com or by calling 1-877-322-8228. While you can order all three free credit reports at one time, I recommend staggering them out over the course of the year. Keep an eye out for anything that looks suspicious, such as a new credit inquiry or a new account, and contact the credit bureau directly if you notice any issues.

At SVB Private we are here to assist you in any way with your personal financial planning. For more insights about the various topics discussed, please visit Our Insights.

The views expressed in the article are those of the author and/or person interviewed and do not necessarily reflect the views of SVB Private or other members of Silicon Valley Bank and SVB Financial Group. The materials on this website are for informational purposes only, are subject to change and do not take into account your particular investment objective, financial situation or need. Since each client’s situation is unique, you should consult your financial advisor and/or tax planning professional before acting on any information provided herein