New Year’s resolutions are a great idea. They’re about tweaking the daily and weekly habits that stop us from being the person we want to be.
They’re often about eating, saving or exercising better, but these ones are tough to maintain – chips, trips and Netflix are hard habits to break.
But at the heart of every resolution is a genuine desire to take responsibility for ourselves or those we care about.
Here are three responsible resolutions you should make this New Year that you only need to do once a year.
1.Make a plan for when you’re no longer around
Resolutions are about a plan for life, but what’s the plan for death?
Dying without a valid, up-to-date will means the law decides how your assets will be divided. There’s a good chance this won’t be in line with your preferences. It can get messy and put stress on your family. Everyone with any asset worth more than $15k (such as KiwiSaver) needs a will.
If you’ve already got a will, it’s still worth thinking about what’s changed in your life. Maybe you’ve become a parent, bought a house or business, or ended or started a relationship?
If you answered ‘yes’ to any of these questions, then it’s time to update your will.
2.Make a plan for misfortune
Resolutions are often about being healthy – that’s great! But the reality is we all get sick or have accidents from time to time. So, what’s your plan for misfortune?
Many people don’t hesitate to get health insurance, but here are a couple of safety nets that you may have forgotten about.
Firstly, enduring powers of attorney (EPAs). These are legal documents that allow someone you trust to make decisions for you if you can’t make them yourself due to illness or injury. A trustee organisation or lawyer can prepare them for you.
Without EPAs, the courts decide who’ll call the shots for you. This can take some time and may not be the person you would want.
It also means that friends or family will need to pay for your medical expenses and everyday needs themselves, as they won’t be able be able to legally access your money.
Secondly, if you’re unable to work due to illness or injury, your bills, groceries and rent or mortgage still need paid. Income protection insurance can help make sure you and any dependents still have an income to live on.
3.Make a plan to safeguard your savings
New Year’s resolutions are often about being better with money.
It’s important to have a savings plan, but it’s also important to safeguard your assets to ensure they are used for the purpose and by the people you care about, and at the right time.
For instance, you might want part of your savings to go toward a grandchild’s university education. Perhaps you want to make sure that a family member inherits a particular sum when they turn a particular age. Maybe you want a portion of your assets to support an important charity or cause.
Often a trust is the best way to do this. Under the right circumstances, trusts are great a way to ring fence your assets for a particular purpose, while protecting them against relationship or business claims.
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