12 Legal and Financial Tips for 2013 by Howard Nightingale, Toronto LawyerApproaching the New Year, some use the occasion to make the traditional, New Year’s vow. Whether your promise is to stop smoking, renew an old friendship or save more, setting a goal for the New Year is all about, well, renewal; come January 1 the calendar rolls over to a new start, giving us yet one more opportunity.

There’s an old joke about a person who is asked, as midnight, Dec 31 approaches, if he’s made any New Year’s vows.

“Yes, I have,” is the reply.
“And what might that be?” his friend asks.
“My vow for this year,” comes the response, “is to stop making vows.”

While it’s true that most New Year’s vows are short lived, it’s at least an attempt to take the initiative. Not sure of what you might vow? Here’s my suggestion:

For 2013, my suggestion is to vow that we get our legal and financial houses in order.

One of the key reasons that a vow fails is that the task can seem overwhelming; my solution is to take one step at a time. Below I’ve listed 12 tasks, similar to Hercules and his twelve tasks; but whereas he rushed from task to task, since we have the entire year, the idea is that your goal is to accomplish just one task each month.

Let’s start with some legal concerns:

1. Make a will.

It’s that simple. Call a lawyer; make an appointment and you’re almost home.

2. Review and revise your will.

Times and life changes: if you have a will older than 5 years it’s probably time to reappraise it.

3. Make a living will.

Who will decide for you, should you no longer be capable of making your own decisions? This will expresses your wishes against the possibility of such an event. Choose carefully: the person(s) with power of attorney will make medical, financial and even property decisions for you, as directed by your living will, should you be incapacitated.

4. Appoint and empower an executor for your estate.

The executor is responsible for settling all matters pertaining to your estate in accordance with your wishes, so you need to choose wisely. How does the executor know your wishes? See task #1!

5. Fully protect your children in the case of a death of both parents or divorce and remarriage.

No one likes to think of divorce or a double death, and so the fate of children in such circumstances is sometimes unplanned. Perhaps when you made your original will you didn’t have children but now you do. See task #2!

Now we can switch over to financial tasks:

6. Make a budget, and pay yourself first.

You can’t be over-budget if you don’t have one to begin with. And budget item one, not the last, is to put away a set amount for monthly savings. You can’t invest if you don’t have anything left over to invest.

7. Review your life insurance.

This assumes that you have life insurance. Call your company or your agent. Life circumstances change and so do the needs of your life insurance.

8. Pay down your mortgage

For retirement planning, will you own your home “free and clear?” Have your mortgage paid off, as well as any other large debt loads, so that you can retire on a reduced income. Paying your mortgage down quickly will save thousands, possibly tens of thousands of dollars.

9. If you have children, open an RESP

A registered education savings plan ensures funds for your children’s post secondary education. Talk to agents, life insurance companies, banks and trust companies.

10. Maximize your RRSP contributions

If you haven’t been able to make maximum contributions, you might direct some of those budget savings to your RRSP, or create an automatic monthly transfer.

11. Open a TFSA bank account.

Both husbands and wives can have a tax free savings account. Tired of paying taxes on interest? Speak to your bank representative and open up a TFSA.

12. Open an OHOSP (Ontario Home Ownership Savings Plan)

This applies only for people who are saving towards the purchase of their first home. If that’s you, definitely speak to your bank.

13. Review your mortgage insurance: (In the interest of providing a value added practice, consider this a “Baker’s Dozen” – one extra just in case.)

If your life insurance is sufficient, you might be better served by putting your mortgage insurance fees into paying down your mortgage. Speak to your bank.

A final word: not all of these tasks will apply to you. Obviously, you won’t be starting a first time home buyer’s ownership plan and planning for retirement at the same time. Check those that you apply to you and then transfer them to a calendar, putting each one of these tasks at the first of the month. Start with January, 2013. And as they say in the commercial: “Just Do It!”

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