Every December, financial planners are asked for a year-end planning list. The challenge is that each person's situation dictates different year-end activities. For those who really have a handle on their financial picture, year-end planning really takes place about mid-September, not mid-December. How can you get ahead of the planning curve? Get organized!

One strategy that we have used successfully with our clients is the creation of a Family Financial Record. We suggest that clients use either a large, three-ring binder or a separate file box and create index tabs for the following categories:

° Personal Papers–Documents relating to birth, marriage, divorce, military service, social security, etc.

° Sources of Income–Pay stubs, employment contracts, annuity, social security and retirement benefit statements, notes receivable, rental agreements, etc.

° Financial Assets–Bank, brokerage, mutual fund account statements, IRAs and other retirement plan statements, appraisals and HUD-1 statements for any real estate, documents relating to business interests, etc.

° Taxes–Three years of prior tax returns, personal property and real estate tax records, etc.

° Deeds & Titles–Real estate, automobiles, etc.

° Insurance Policies/Employer Benefits–Life, health, property & casualty policies and the most recent annual statements of benefits/premiums.

° Mortgages, Loans & other Liabilities–all loan agreements, promissory notes, a listing of all open credit cards and lines of credit, etc.

° Estate Planning–Wills, trusts, executor instructions, etc.

° Miscellaneous–Other documents of importance

Many of these documents should be kept in a safety deposit box. This would include original or certified copies of birth certificates, social security cards, records of adoptions, marriages, death and divorce, citizenship and veteran's papers, as well as any stock or bond certificates that have not been deposited into a brokerage account, deeds, titles, and life insurance policies. We suggest that you make a photocopy of each document in your safety-deposit box and insert the copy into your binder or file with a notation as to the location of the original.

It has been our experience that people resist organizing their records because the process is often tedious and confusing. The end of the year is the ideal time to create a Family Financial Record because you will be receiving end-of-year summary statements for most of these items. As you begin to collect these documents for your taxes, make a copy for yourself and file it away.

Once you have this record completed, tell the appropriate family members of its existence and location. For couples where one spouse assumes all the responsibility for the family's finances, or for a single older parent, this level of financial organization will have tremendous value for the spouses and adult children who must suddenly take over because of a death or incapacity.

The completed record, if annually updated, will become a valuable tool. It will streamline the data gathering process for April's tax season, obtaining or refinancing loans, and other financial transactions during the year.

Even more importantly, a complete record will allow you to more easily take stock of your financial situation on a regular basis. It often serves as a gentle reminder to those of us who procrastinate over updating our wills or transferring assets into trusts that were specifically created to hold them.

Going into 2005 with your financial life well organized will help you to recognize and take advantage of planning opportunities all year long, instead of trying to "catch up" in December, when it often difficult to really make a difference. Having your affairs in order is the first step to effective financial planning.

Helen L. Modly is a principal of Focus Financial Consultants, Ltd., in Middleburg, VA. The firm offers wealth management services, including comprehensive financial planning, fee-only investment management, and specialized divorce-related consulting. Ms. Modly is a Certified Financial Planner, as well as a Certified Divorce Financial Analyst. She has lived in Fauquier County for 20 years.