Financial and Estate Planning Ideas

1. Update your retirement planning – As we live with market volatility and future tax and entitlement program uncertainty, it might be a good time to check your planning assumptions and your progress toward those long term goals.
2. Reevaluate your education funding strategy – are you still on track to reach the education funding goals? It is important to make sure the asset allocation matches the child’s time horizon for needed funding. Will financial aid be a factor in funding education costs? 
3. Have there been any major changes in your life - Events like the death of a spouse or parent, birth of a child, divorce, marriage, etc. all have a profound impact on your planning and may cause the need for an update of your overall planning.
4. Have you thought about the decision on when to take Social Security benefits and Medicare coverage -  This is an area that can create some planning opportunities and headaches and needs to be thought through carefully
5. Take advantage of historically low interest rates – have you taken full advantage of this in the debt side of your balance sheet? What is the current rate on your home mortgage or any other debt you have in place?
6. Make sure your asset allocation is in line with your targets – if you have not looked at this in a while, it may be out of alignment with what makes sense for your risk tolerance and return goals. Are you well diversified across a wide variety of asset classes?
7. Have you incorporated alternative investments into your portfolio - Are they really providing diversification benefits at a reasonable expense and tax cost? Are they truly uncorrelated with your other asset classes? How have they performed in the past quarter?
8. Review where you stand for 2011 year end tax planning? This could be a year when mutual funds that have declined in value still payout capital gains, what can you do about this before year end? Are there losses you should be harvesting before year end to offset capital gains?
9. What to do now to plan for potentially higher income tax rates – We already know about the additional Medicare surtax on investment income starting in 2013, but it is very likely that you may also face higher income tax rates after 2012. Is there anything you can do to have future income taxed at today’s low rates that we have through the end of 2012?
10. Consider exercising stock options while tax rates and stock prices are low - If you are a corporate executive consider whether there is anything you should be doing now with your stock options and other compensation / stock based awards? If tax rates do rise after 2012, it may be better to bring income in before that time.
11. Review your existing life insurance policies – with the increased $5 million exemptions, you may not need the coverage that you put in place to pay estate tax. As our financial situation evolves over the years, it is important to make sure your insurance plan fits your goals. Are your life insurance trusts fully funded? You might want to use the expanded gift tax exemption to put in more cash.
12. Talk to your parents about their personal financial situations – too many times, we do not have these conversations until it is too late. With the volatile markets, low interest rates, and increasing health care costs, it is very important to make sure your older relatives are doing all of the planning they need to do.

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