Financial Planning Can Be 'Like Going
To The Dentist'

Do you want to know why many people do not bother with a financial planner? There are several reasons.
James Sollisch, a freelance writer and communicator for National Public Radio, laments that he visits his "financial advisor" every few years and likens the experience to "going to the dentist". He states that he can stand the pain; but it's the promises that he makes, and breaks, that are so humiliating.
His promises include upping his 401(K), increasing his contributions to a Roth IRA, building a college fund, and considering long term care insurance. All of these will help secure his future; but he comments that it is at the expense of today.
"You would think financial planning is exactly what we need. But most of what planners recommend is designed to make us feel horrible when we can't afford itŠWhere did we get this idea that all of us could live like the rich and retire early to a life of plenty if only we made the right investments?", Mr. Sollisch is quoted.
While Mr. Sollisch did not indicate who his financial advisor is, it is obvious to me that there are problems with priorities. The planner had his priorities which apparently were to set up a complete program now. This is a major reason that people do not want to use a financial planner. Do it all immediately, and then I can go onto other people.
A financial planner, such as I, meets with you to:
1) review your current financial status,
2) review with you what your goals and needs are,
3) establish, with you, a priority list of various ways and means to meet your desires, if possible, and
4) only then can specific details be worked out.
Another reason that people do not use financial planners is the methods of compensation. Most planners receive a commission upon a sale of a product so there is a push to close a sale. Some planners are now going to a fee based compensation plan. After an initial meeting to determine if I can assist you, my fees are normally based on hourly rates. You are free to use any investment advisor, attorney, trust officer, or insurance person you desire, although I may be able to assist with implementation.
To summarize, many planners attempt too ambitious a program with the planner's priorities and compensation coming first. I plan for the client, establishing the clients needs and priorities at a reasonable fee.

Beware Of The Joint Ownership Inheritance Trap

Beware of placing property in joint ownership so it will pass to the other joint owner without going through probate ... A Trap ...
Once property is placed in joint ownership, you lose control of the interest in that property. If you later regret the transfer, it is too late to reverse it without the consent of the other owner.
With a will, you can change distributions up until the last minute, as long as you are competent to do so.
Joint property is part of your gross estate and may be subject to estate tax unless the contribution was provided by the surviving joint owner and/or your estate in less than the tax-exempt amount.
However, if most of your property passes by joint ownership, there may not be enough money in the estate for the executor to pay estate taxes. The IRS can then directly pursue any and all heirs who received property from your estate to collect the unpaid tax up to the amount they received.
Nightmare scenario: You place major assets in joint ownership with an heir, who later turns out to be a ne¹er-do-well. You cannot get the assets back without his or her consent. When you die, the heir refuses to pay their share of the estate tax - perhaps they can not after squandering what they received. The IRS goes after your other heirs to collect the estate tax due. Lawsuits abound - their cost depletes your estate and only lawyers benefit.
Much better: Consult with an estate planning expert to set up a sound estate plan that will meet your objectives with maximum flexibility and minimum cost. Remember that your will does not govern distributions of joint accounts, and in most cases, retirement accounts as well as any other non-probate assets.

Did You Know?

Did you ever notice that when you put the two words "THE and "IRS" together, it spells 'THEIRS"?
"Most if what planners recommend is designed to make us feel horrible when we can't afford it."
- James Solisch
National Public Radio