A Multi-Faceted Plan

One of the silver linings to the economic upheaval of the past two years is people’s increased interest in re-examining and truly understanding their financial circumstances.

From retirement accounts to estate planning, people are carefully scrutinizing nearly every financial account and document. As a result, many people have adapted their portfolios to more accurately reflect their risk tolerance and their financial needs.

That said, while individual accounts may be better positioned than they were a few years ago, we often focus too heavily on building consistency within an account or document, but don’t see how all the pieces fit together across our financial lives.

Most of us build a financial plan over time. We add retirement accounts, change jobs and create wills at different stages of our lives. As the years pass, our priorities, assets and families change. Laws are refined or entirely transformed. While a document or account by itself may seem to be perfectly aligned with our goals, it may be working against the other pieces of our financial plan.

Titling assets

There are many opportunities for people to name beneficiaries of their assets, whether through a designation on a retirement account or details in a will.

It is not uncommon for the beneficiary designations for the same asset to be different across documents — and it’s not always obvious to the owner which supersedes the other.

For example, if you’ve listed a beneficiary on your IRA account and a different beneficiary for that same account in your will, the listing on the account itself will supplant any stated desires in your will. While a will may seem to be the final word on your intentions, often it’s not. Making sure that there’s no conflict between your assets and your plans for them is a crucial part of any financial plan.

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