New Year, New Peace of Mind

The ball has dropped, the champagne is flat, and the “New Year, New Me” energy is at its highest ebb. Usually, that means resolutions that require some degree of grit before the habit forms, such as drinking more water or doing that resistance-training workout, may have already been broken. But what if I gave you the opportunity to meet a financial and estate planning resolution that only takes ten minutes and requires zero willpower to maintain? That’s right, everyone! It’s time to check the beneficiaries of your financial accounts!

I was reading an article that talked about the “one-and-done” theory in behavioral economics. It’s the difference between a continuous action (think strength training) versus a one-time decision (like installing a programmable thermostat). Continuous actions are harder because they require us to fight against the couch and Netflix, which are calling our names. One-time decisions are powerful because, with just a single moment of high effort, we reap a permanent payoff. That’s why checking your account beneficiaries is the ultimate one-and-done New Year’s resolution.

Why is this important, you might ask? Even as estate planning attorneys, we all have ghosts in our financial past. Maybe you set up a 401(k) thirty years ago, and have no idea who you named as your beneficiaries. Maybe your life insurance policy still lists a parent, or an ex-spouse(!) Or, if you’re like me, your pension didn’t list your descendants as a death beneficiary behind your spouse. See? It’s not so hard to admit our shortcomings in a very public blog post. My point is, even you can go back and check your work to make sure it’s correct. Yes, you!

Logging into your accounts and finding your beneficiaries typically takes around 10 minutes, depending on the complexity of the menu structures. We did this task ourselves this winter break in our household. For many types of accounts, you can simply update beneficiaries online. Some will require a DocuSign process, and, yes, some banks may even require a visit to a brick-and-mortar location. However, knowing you’re avoiding probate and that your wealth is going to the right folks is worth every minute of that concentrated effort. And the payoff lasts for the long term.

Don’t let another year go by with your legacy left to chance. Take ten minutes today, use your New Year’s momentum, and secure your “one-and-done” victory!