Spring cleaning goes beyond obvious chores

Now is a good time to tidy up financial situation

By: By Mike Wells | SPECIAL TO THE JOURNAL
Published: April 18, 2010

This is the season for spring cleaning in and around our homes. But it is not just our closets and windows that need attention.

A few other areas of our lives might also need sprucing up:

• Credit-card debt: Many of us have a wide assortment of debts. Paying off credit cards, especially with higher interest rates, would help your monthly budget a lot.

If you are not sure how to make the best choices, contact Consumer Credit Counseling Service, a well-regarded United Way agency, at 896-1191. A confidential session will tell you a lot about where you could tighten up your discretionary spending, and, over time, reduce a lot of your debt service.

• Mortgage debt: Many people in our country are out of work and are struggling to make any mortgage payments. But a lot of people who are secure in their jobs have mortgage-interest rates that are much higher than the rates available on the market today.

Check with your mortgage holder, and other lenders, too, and see if it is worth it to refinance your mortgage. You may be able to save more than you realize.

• Liability limits on your home and your vehicles: Check to see if they can be raised appropriately. Accidents that are your fault at your home or in your vehicle are perhaps your greatest legal risk. You may be able to pay for your better liability coverage with the money saved from the coverage you may no longer need, or need as much, such as collision coverage on an older vehicle.

And if you sell a vehicle, keep your liability coverage until the title is issued to the new owner.

• Beneficiaries: Do you have the right beneficiaries on some of your major assets (retirement plans, life-insurance policies)? If you get divorced, the now former spouse may not yet be removed as a beneficiary. You should be sure that the beneficiary you designate is consistent with your overall planning objectives. Your will won't control where these assets go.

Who is in charge of your assets if you get sick, or when you are gone? If it is your (now former) brother-in-law, who was a good choice when you prepared your documents, he may be the last person you want in charge now.

• Legal plans to pay for your lawyer: There are a number of well-regarded legal plans that provide for very favorable coverage for lawyers fees for many routine legal matters. If your company offers such a plan, you should think about taking advantage of it for some of the suggested "cleanup" planning described above.

Here is how they work: You pay a modest monthly premium. If you need a legal service that is covered by your plan, the lawyer is paid by the plan administrator, often at a price below that lawyer's normal charge. Areas that are commonly covered include estate-planning documents, home purchases, and sometimes refinancing your mortgage. The premium you pay is much, much less than what these services would otherwise cost you.

Find out if the enrollment period at your company is coming up soon.

Sometimes companies have a working relationship with a law firm, by which the law firm provides short seminars on common legal issues to employees. As part of the arrangement, the law firm may offer preferred (reduced) charges for some of the legal services discussed in this column. See if your company has such a relationship with a law firm.

A few quick telephone calls could result in the best spring cleaning ever.

Remember: An informed choice is a smart choice.

Mike Wells is an attorney with Wells Jenkins Lucas & Jenkins PLLC, in Winston-Salem.