New Year’s Resolutions: Legal and Financial Matters

Resolutions: Lose weight.  Exercise.  Eat Healthy.  Great.

But, here are some smart New Year’s resolutions to upgrade your legal and financial status:

1.   Balance & review all accounts monthly or more often.  Rampant identity theft and big box store security breaches make this one of your top resolutions.  Some people check bank transactions daily.  There’s software to help balance accounts.  Merchants and banks make mistakes.  Fraud happens all the time.  Review all credit card statements right away line by line.  Ever cancel a service but the charges keep appearing?  Failing to dispute on time waives your rights.

2.   Contribute to your own life savings.  Touch base with a financial advisor on tuning up a 401K, SEPP IRA, Roth or other alternative.  Reduce tax liabilities and do something for your own future this New Year.

3.   Insure motor vehicles.   You don’t need it in NH?  Oh yes you do.  Think about it. Do you think that driver irresponsible enough to run the stop sign is responsible enough to have insurance to cover your injuries?  That your car “isn’t worth insuring” ignores the fact that you or your loved ones might be hurt.  Uninsured accident medical bills can bankrupt you.  If the other driver has no insurance, you’re unprotected.  Taking the uninsured other guy to court wastes everyone’s time if they have no assets and little or no income to pay a court judgment.

4.   Get a receipt for everything.  Fight back when merchants say “you don’t want a receipt do you?”   If something happens, they’ll ask if you have one.  Besides, you never know when you might need to justify where you’ve been and when.  Many stores offer an email receipt.  Just say yes.

5.   Do not pay back credit card balances out of a 401K.  401K plans and any ERISA retirement accounts are nearly always entirely exempt from creditors in bankruptcy and lawsuits.  Exemption laws offer protection against draining down life savings to pay ever growing credit card interest, fees, charges and other add-ons.  Don’t even think about it.

6.   Never use quickie internet or big box forms. A form cooked up in a distant state is doubtful to meet legal requirements specified in the ever changing state laws where you live.  You will save money in the long run and avoid costly legal problems by retaining an attorney to listen to your personal needs and provide correct legal documents.

7.   Formalize business relationships.  People often start a venture with little or no formalization, sometimes with friends, family and otherwise thinking that everything will shift paradigms.  When, notice I did not say if, things go badly the lack of individual operating agreements or negotiated by laws, neither of which are spit out by the big box or web site software, will bring needless, lengthy and costly litigation.

Happy New Year.  Be safe.  Be well.  Be smart.

This blog post adapted from an article © 2013 Eagle-Tribune Publishing Co. by Andrew D. Myers, which appeared in About the Law, Derry News.

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