A Guide to Starting Family Financial Conversations

A Guide to Starting Family Financial Conversations

By Jeff Johnson I’ve been a close observer of the way families make, communicate and implement financial decisions for most of the last four decades. In that time, I have learned that many individuals and couples make family wealth and lifestyle planning decisions privately, then avoid discussing them with other family members because it’s an uncomfortable conversation. The family leader or leaders usually know it would be better, in many cases, to explain details, discuss issues, and secure commitments to and acceptance for the family’s financial direction. Clarity equals confidence, and being financially confident empowers a fuller life for all involved. Yet many, if not most, family leaders struggle to share the intimate specifics, fail to collaborate on decisions, or neglect to have reasonable and open conversations about a range of family wealth and life planning matters. In my experience, the reason for this is twofold. First, as I previously mentioned, it’s just plain uncomfortable (or, at least initially, easier to do nothing at all). Second, few people are trained to hold money discussions and just don’t know where to start or how to do it. So, you may ask, what exactly is involved in starting a constructive dialogue about your family finances and the decisions that affect them? Having worked with hundreds of families to meet their life and long-term financial goals, and based on my unscientific observations, here is where and how you might want to start your family’s next important conversation about money: 1. The late Stephen Covey, a legendary author and speaker, advocated planning by “starting with the end at the beginning.” Before sitting down for...
Why 17 Dead in a Duck Boat Accident Should Be an Estate Planning Gut Check for Us All

Why 17 Dead in a Duck Boat Accident Should Be an Estate Planning Gut Check for Us All

By Joe Delaney I just returned from a week’s vacation that culminated with my participating in the Trans Tahoe Relay swim across Lake Tahoe. This is my 16th year making the 12-mile swim. As I swam, I was awestruck by how blue the water was. With a cloudless sky above, the sun was shining rays of light all around me. It was a breathtaking sight. I also found myself reflecting on how tragedy can strike at any time, as it did recently in Branson, Missouri. 17 people died when an amphibious duck boat sank in a sudden, severe thunderstorm on July 18th. They were enjoying their vacation, just as I was. How prepared were they for what would happen to their families in the event of their death? How prepared am I? What about you? Do you have a plan for your estate before tragedy strikes? A GOOD PLAN IS DRAFTED, EXECUTED, FUNDED AND TESTED DRAFTED … Frequently, I have clients come to me with an estate plan drafted in beautiful binders (this also applies to business succession planning, a topic for another day). I make sure they know that’s a great start, because drafting a plan is the first step. EXECUTED … After I congratulate them on having a written plan, I sometimes have to criticize them about the dust that has settled on the binder. Ideas are not enough. You must execute the necessary estate planning documents. Create a will. Each state has intestacy laws that determine how your estate will be distributed after your death if you don’t make those decisions first. Don’t leave it up...
Who Will Raise Your Kids If You Can’t?

Who Will Raise Your Kids If You Can’t?

Michael J. Evans, Founder, The Cogent Advisor, 6/3/2015 Who will raise my kids if I can’t? This is a huge and unthinkable question. So it’s no wonder that I frequently hear a multitude of excuses from family, friends and clients – all the parents of young children – who have not yet set up their essential estate plans. Often, the hurdle isn’t finding the right lawyer, or spending the money to get it done. It’s making that gut-wrenching decision about who to designate as the guardians of your minor children in your stead. As unpleasant as the task may be, the consequences of postponing it are worse. In the absence of carefully prepared estate-planning documents with proper designation directions, you’re effectively leaving it up to a judge to decide what is in the best interest of your children, without your input. If you’re facing this sort of wall in your family’s estate-planning process, the following steps may help you make the necessary leap from best intentions to appropriate action. Get Ready: Creating Planning Momentum First, list the people that come immediately to mind as the most likely candidates. Go with your gut, because your first instincts may well be the right ones. Next, narrow down your choices by considering the key questions listed below. For now, don’t try to come up with THE right choice (unless it’s no-brainer obvious). Simply take note of the advantages and disadvantages for each possibility. If you are a couple, think about these questions individually before coming together to share your answers. Are they young enough? Your parents may already have a track record...
Estate Planning: An Ounce of Prevention, a Pound of Cure

Estate Planning: An Ounce of Prevention, a Pound of Cure

By: Joe Delaney What would you do if you saw the future and learned that you would die in a car accident next week? Or that you would suffer severe brain injury that was going to put you in a coma for the rest of your natural life? We don’t have crystal balls to tell us when our time on Earth is up, but some people experience close calls that are as clear a warning sign that our time is limited as you’re going to get. My friend Paul is arguably in better shape than most people I know. He’s an athlete. He eats right, takes good care of his body. None of this prevented the cardiac arrest that left him flatlined on a hospital bed three times before he was fully resuscitated. His experience makes us all think about our own mortality and the suddenness with which decisions could be made for us we wish we would have made for ourselves. That’s why, for this article, I reached out to estate planning attorney and expert Jennifer Jaynes to discuss estate planning. Jennifer outlined the two basic scenarios in which a little planning makes the difference between an orderly, financially conservative administration of an estate and a long, expensive, chaotic process. WHAT HAPPENS TO MY ESTATE IF I’M INCAPACITATED? Without a Plan: If you were in a coma and had never specified who would handle your finances or make health care decisions, someone close to you – a spouse, friend or other family member – would need to petition the court to appoint them your conservator. Even if it’s...
In Defense of the Home Mortgage: Not all Debt Is Bad Debt

In Defense of the Home Mortgage: Not all Debt Is Bad Debt

By: Michael J. Evans I believe it’s time to take a fresh look at a timeless question: Is it better to own your home outright or maintain a mortgage? Given all the factors involved, an experienced wealth manager can really earn his or her keep on this one. When weighing the advantages and disadvantages of holding a mortgage, it’s important to think through subjective considerations as well as the objective, number-crunching comparisons. With all due respect to William Shakespeare, who admonished, “Neither a borrower nor a lender be,” there are often a number of valid reasons that homeowners may want to maintain a mortgage on their principal residence, even if they could afford to pay it off. A Home “Investment” Can Cost You While hopefully your home gives you comfort, joy and security, the money you put into this highly undiversified holding is often more like an expense than an investment. Think of it as the price you pay for all that comfort and joy, whether or not your home appreciates in financial value. So, when you are considering the best use of your investable assets, your affordable home is usually best positioned toward the lower end of the places you want to lock up your equity. (By affordable, I mean a home that does not expose you to the risk of losing it should you fall on hard times. I’ve never seen anyone lose their home because their mortgage was too big; it’s generally because they purchased a home that was too high-priced for their financial situation.) A long-term mortgage can free up your financial assets for greater...
A Shocking Number of Americans Don’t Have a Will: Here’s How to Prepare

A Shocking Number of Americans Don’t Have a Will: Here’s How to Prepare

By: Tim Maurer Click here to watch the original video. By clicking on any of the links above, you acknowledge that they are solely for your convenience, and do not necessarily imply any affiliations, sponsorships, endorsements or representations whatsoever by us regarding third-party Web sites. We are not responsible for the content, availability or privacy policies of these sites, and shall not be responsible or liable for any information, opinions, advice, products or services available on or through them. The opinions expressed by featured authors are their own and may not accurately reflect those of the BAM ALLIANCE. This article is for general information only and is not intended to serve as specific financial, accounting or tax advice. © 2016, The BAM...
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