What Financial Documents Should I Review Before Year-End?
As the year winds down, you face a critical opportunity to assess the integrity and alignment of your financial documentation. This isn’t just about tidying up paperwork—it’s about ensuring your financial architecture supports strategic decisions, tax efficiency, and long-term legacy planning.
Below are five questions—and answers—that can guide a more sophisticated year-end financial document review.
Q1: How should I evaluate the coordination between my estate plan and business succession documents?
Answer: For business owners, estate planning and succession planning must be tightly integrated. Review whether your operating agreements, buy-sell arrangements, and shareholder agreements align with your will and trust documents. Are ownership transfers structured to minimize tax exposure? Have you accounted for liquidity needs to fund estate taxes or buyouts? Coordination across these documents ensures continuity and protects both family and business interests.
Q2: What should I look for in my investment policy statement (IPS) and portfolio reporting?
Answer: Your IPS should reflect your current risk tolerance, investment objectives, and constraints. Year-end is a good time to revisit whether your portfolio performance and asset allocation are consistent with the IPS. Look for:
Deviations from target allocations
Concentration risk in specific sectors or issuers
Tax efficiency across account types
Realized vs. unrealized gains
Also assess whether your reporting tools provide sufficient transparency. Are you receiving performance attribution, benchmarking, and risk metrics that support informed oversight?
Q3: How do I assess the adequacy of my insurance portfolio in light of estate and liquidity planning?
Answer: Insurance should be evaluated not just for coverage, but for strategic function.
For example:
Does your life insurance provide sufficient liquidity to cover estate taxes or equalize inheritances?
Are your policies owned by the appropriate entities (e.g., irrevocable life insurance trusts) to avoid estate inclusion?
Have you reviewed premium funding strategies and policy performance?
Consider whether your disability and long-term care coverage align with your income and asset protection needs, especially if you’re transitioning out of active business ownership.
Q4: What tax planning documents should I reconcile before year-end to support proactive strategy?
Answer: Go beyond basic forms and review:
Projected income and capital gains across entities and accounts
Timing of charitable contributions and donor-advised fund activity
Retirement plan contributions and catch-up eligibility
Passive activity loss carryforwards and net operating losses
Real estate depreciation schedules and cost segregation reports
This level of review supports strategic decisions such as Roth conversions, entity restructuring, or timing of liquidity events. Collaborate with your CPA to ensure alignment between your tax documents and broader financial strategy.
Q5: How should I evaluate my financial statements and cash flow reports for strategic planning?
Answer: Sophisticated planning requires more than a budget—it demands a dynamic understanding of cash flow, liquidity, and capital deployment. Review:
Consolidated net worth statements across entities and ownership structures
Cash flow projections for the next 12–24 months
Debt service schedules and covenant compliance
Capital calls, distributions, and investment commitments
Use this data to inform decisions around asset purchases, philanthropic giving, and portfolio rebalancing. It also supports stress testing your financial plan under different economic scenarios.
A high-level year-end review of your financial documents is essential for strategic clarity and control. It’s not just about compliance—it’s about ensuring your financial infrastructure supports your goals, protects your legacy, and positions you for opportunity.
If you haven’t already, consider building a centralized document dashboard or vault to streamline collaboration with your advisory team. The more organized and integrated your financial records, the more agile and informed your decisions will be.
This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.