With two months to go before we update our annual tax guide, changes to the tax code are again being discussed. Depending on when you read this, the fate of those changes may have been decided. Then again, perhaps not.

I’m leery of saying too much about them right now because the legislation can change. What I have seen proposed so far should not impact the suggestions provided by IRA expert Ed Slott.

We asked Ed to write about estate planning for IRAs for two reasons. One, the subject is of interest to many AAII members. Two, October is Financial Planning Month and National Estate Planning Awareness Week is scheduled for October 18 through October 24.

Ed uses nine different examples to demonstrate the ins and outs of the SECURE Act’s 10-year withdrawal rule for IRA beneficiaries. The law ended the ability for most non-spouse beneficiaries to take distributions from an inherited IRA over the course of their lifetime. This former practice “stretched” the duration of an IRA. Now most inherited IRAs—both traditional and Roth—must be completely emptied within 10 years after death.

The 10-year rule does not apply in all situations. Rather, it depends on the beneficiary’s designation—and this designation can change after an IRA has been inherited. An example would be the child of a deceased IRA owner. This heir would be able to stretch distributions up until they turn majority age or reach age 26 if they are still in school.

Not everyone’s estate planning needs are going to be simple enough to address in the pages of the AAII Journal. Complexities and potential liabilities can exist or arise. While some of you may share the same disdain about paying a lawyer to assist you with estate issues as Captain Hadley did in “The Shawshank Redemption,” it may well be worth your time. (Hadley, as some of you may remember, was the one who threatened to throw the main character Andy Dufresne over the side of a building in the movie.)

Regardless of whether you meet with an estate attorney, set a reminder to review the beneficiary information on all of your financial accounts, annuities, life insurance policies and pensions once a year. Pay attention to who you have listed as your primary and secondary beneficiaries. If you don’t have a secondary beneficiary listed—and percentages of how the accounts or policies should be divided up—add one.

As you review the beneficiary information you have listed—again, annually—consider whether there has been any change in your family or beneficiaries. If so, fill out all the necessary paperwork, send it in to the financial institution and confirm that the changes have been made. Failing to do so can lead to unwanted consequences.

I believe considering changes in your family status and life stages is so important to financial planning that I made it part of Step 5 of our PRISM Wealth-Building Process: monitoring your allocation, progress and life stages. Not only can changes impact your estate plans, but they can also impact the goals you are relying on your portfolio to help you achieve.

The first part of Step 5—monitoring your allocation—is discussed here. I will address the other parts—monitoring progress toward your goals and monitoring life stage changes—in an upcoming AAII Journal article.

Ironically, the very next trading day after I wrote the article about monitoring portfolio allocation for this issue, the S&P 500 index incurred its biggest daily loss since May 2020. The 1.7% decline was attributed primarily to concerns about property developer China Evergrande Group defaulting on its debt.

On the day of the decline, the headlines and the lack of context about the large-cap index still being very close to its all-time high reinforced my belief about looking and acting less often. Though the attention paid to the financial market’s daily moves may make it seem as if you should pay attention to your portfolio every day, the reality is far different. There isn’t a reason to review your allocation any more frequently than once or twice a year unless you are purposely following a tactical approach.

Your individual investments may require more frequent monitoring depending on what is held in your portfolio. Even then, you can get away with looking less often than you might think. Most stock portfolios can be reviewed on a weekly, monthly or quarterly basis. Mutual funds and exchange-traded funds (ETFs) can be checked once a quarter, semiannually or even annually. Individual bonds intended to be held to maturity can be checked semi-annually when interest payments are due.