Resolved …

Posted by on December 29, 2010 @ 10:23 am in Personal finance

I’m pretty sure that I resolved several years ago to stop making New Year’s resolutions. My track record at sticking to resolutions was abysmal.

Actually, I’ve done pretty well at hitting savings goals over the years, because I don’t rely on willpower. I use automatic savings—through my 401(k) at work and through preset automatic transfers from checking into investment accounts. These mechanisms are artificial willpower—a painless way to stiffen my backbone.

But other goals can’t be put on autopilot. I haven’t heard of an automated way to reduce caloric intake and increase exercise to lose weight, for example. Alas, to carry out some resolutions, you actually have to DO something.

When it comes to financial matters, you probably have your own “to do” list. At the top of mine is updating the basic elements of our estate plans. We’ve procrastinated way too long on updating our wills, updating beneficiaries for retirement accounts, looking at financial and health care powers of attorney, and outlining our wishes on health care in the event of debilitating illness or accident (often called “living wills”).

There’s some comfort, but only some, in knowing that I’m not the only procrastinator (Forbes reported on a Harris survey that found half of respondents don’t have any of the basic estate-planning documents in place).

So, for 2011 I’ve decided to break my “no resolutions” resolution. I resolve to update or create the documents necessary to direct which individuals and charities are to get what from our assets and to outline what we want done—and don’t want done—in terms of end-of-life care.

Fulfilling this resolution is the right thing to do for heirs—planning can eliminate misunderstandings or family squabbles and make things easier for loved ones when we shuffle off.

Like most resolutions, this one probably won’t be carried out unless I set specific deadlines and checkpoints. I’ll set a June 30 deadline for completing all the details. And the first checkpoint is to call an estate-planning attorney by January 15 to make an appointment. Although I’m comfortable making investment decisions on my own, drawing up wills, trusts, or powers of attorney are not do-it-yourself activities.

I’ll report back in a few months about how I’ve done. Putting this resolution on the record may be just the artificial backbone I need.

Note: The link to forbes.com will open a new browser window. Except where noted, Vanguard accepts no responsibility for content on third-party websites.

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