As enjoyable as our day jobs can be, including dealing with successful, pleasant, interesting people, watching their financial dreams take shape, and sharing the recent market boom, it is not all fun and games. Because of our approach to total personal planning, we need to cover topics that are, by their very nature, uncomfortable. These topics include illness, disability, and death, and are not confined to the clients themselves. Family relationships play a huge role in financial planning, and properly documenting clients’ wishes is critical.
About half of Americans are intestate, simply meaning that they have not prepared a Last Will and Testament. This demographic includes lawyers and other professionals at about the same rate as the general public. Not directing your asset distribution during your life can lead to problems, in even the simplest estate.
There is an old saying in our business that goes like this: “If you’d like to see the worst come out in people, simply attend the reading of the Will.” But that is likely not even the worst scenario. I suspect you’d see even more of the dark underbelly in people if there were no Will to read! (We use “Will” and “Trust” interchangeably for this discussion.)
How do you know when you should hire a competent Certified Financial Planner™? Here are a few items deserving of consideration. Do any of these common situations apply to you?
- You do not have a Last Will and Testament, or it is many years old (and maybe from another state and/or a prior marriage)
- You do not have a Health Care Directive in the event you can’t make important medical decisions for yourself
- You do not have a valid Durable Power of Attorney for a trusted person to help with your finances, should you become unable to do it yourself
- You own real properties other than a primary residence, either in the same state as your residence, or perhaps in other places
- You do not have a Living Revocable Trust (not everyone needs one, but there are increasing numbers of reasons to do so, and especially in Florida)
- You have outdated Beneficiary Designations on 401(k) accounts, IRAs or life insurance policies
- You have been through a divorce and have blended families
- You are starting to plan for retirement
- You have some intended beneficiaries that are poor at handling money
- You own investments and/or annuities, but you aren’t sure why you own them
- You have received “sudden money” from an inheritance, lottery, insurance policy, or lawsuit settlement
- You woke up one morning and suddenly realized you haven’t started planning for your future
- You have experienced a changed relationship with a family member
- You have been managing your own investments and are unhappy with your performance
- You have too many accounts in too many places (our term is “financial clutter”)
- You have changed jobs several times, but never bothered to roll old 401(k) plans into a self-directed IRA (see financial clutter above)
- You are still working, but approaching age 55, 60 or so, and want to start taking charge of your own investments (possible “in-service distribution” available to roll some funds into a self-directed IRA)
- You are starting a family and beginning to think about insurance and other boring but critical topics, like funding college educations, getting a mortgage, buying life insurance, managing cash flow, and asking, “How can we possibly do all this?”
Whatever the reason(s) you may be considering seeking professional help with your finances, look for a fee-only Registered Investment Advisor (RIA), owned and operated by Certified Financial Planners™ (CFPs®). They (we) can steer you in all the right directions.
Van Wie Financial is fee-only. For a reason.
