Carvé Diem?

If you’re fortunate enough to have family to spend Thanksgiving with, consider the time you have together as more than a chance to eat, watch football, and nap.  Those too-infrequent times you have with your parents and/or your children are golden opportunities to talk about some of the financial things we always mean to talk about, but seldom do.

People of my vintage and older may have been brought up the way I was—financial matters are private, and not to be discussed with “children.”  Unfortunately, in my house, we never stopped being children to my parents, and it’s only now, when my father is gone and my mother is 84 and overwhelmed that I am allowed to learn of their financial plans.  I am, in fact, now the co-executor of my mother’s estate.  And yet she still won’t let me see her bank statements, and when I reminded her that it will be a nightmare for me if she insists on holding assets outside of the trust that was created to hold all of her assets, she said, “I don’t mind—I’ll be dead.”  Uhm, thanks Mom!

This letter from Joe Dietsch to his son was originally published in 2005, but it’s as relevant today as it was then.  If you are a parent with college age or older kids, don’t keep them in the dark.  One day you may need them, and the more they know the better.  Remember also that these are the people who will pick your nursing home :). If you’re the adult child of an elderly parent and don’t know what their plans are, please consider having the discussion with them over the holidays when you’re together (but not at the Thanksgiving Dinner).

Some topics of discussion with your family might include:

For Adult Children and Their Parents

• Have they created an “In Case of Emergency” (ICE) book* of any sort? If so, where is it?
•  Do you have a safe deposit box? Where is it? Who is deputized? Where is the key?
•  Do you have a will? Is it up-to-date? Where is it?
•  Do you have a health care proxy? Who is it? Where is the paper?
•  What are your end of life wishes? Have you signed a “Do Not Resuscitate” (DNR) order? If so, where is it? More importantly have you discussed your wishes explicitly with your designee?
•  Who is your executor?
•  Where are your accounts held?

For Parents and Their Children

• Do you have any credit cards? Do you understand how much you end up paying for things you buy on credit?
•  Have you ever checked your credit score?
• Do you know how to build a good credit history?
•  You’re working now—does your company offer a 401(k) or other savings vehicle? Are you participating?
•  You have earned income—have you opened a Roth IRA or regular IRA? Do you understand that you can deduct contributions on your income tax returns?
• What are your goals? Do you wish to own a home or condo?

The list of things could go on and on.  The questions above are but a sample of the many things that people often fail to talk about.

Remember the old adage about not planning to fail, but failing to plan?  Opening up the lines of discussion is a good first step. Revisit our blog posting called: Teach Your Children Well (About Money).

Contacting your Trusted Financial Advisor is an excellent second step!

Best wishes to all of our clients and friends this holiday season.

 

* if you need help in preparing an ICE Book see our earlier blog posting about it here

How to Spot a Keeper
September 2014

By Guest Blogger, Sheila Brennan
Compass’s Newest Trusted Advisor

When a couple is divorcing, there are several professionals that should be part of the team to assist in transitioning to the next phase of your life. From a financial perspective, there may be tax implications, employee benefits, retirement plans, investments, insurance, real estate, etc. that need to handled and distributed. The finances can quickly become convoluted. You may find yourself in over your head; and your attorney may be in the same position.

But how do you find a financial advisor you trust? How do you find a financial advisor who is qualified to be part of your team? How can you differentiate between the credentials? How important are those credentials when you’re hiring a financial advisor?

More than a decade ago as I embarked on my divorce, I was lucky enough to hire Tim Shanahan, President of Compass Capital. Years before the final agreement was drafted, the marital home was sold and the proceeds divided between the parties. Since I wasn’t sure where I wanted to live, I had Tim “hold” my money in an account at SEI Trust before I purchased a post-marital home. It was then that we began the conversations about the future, my financial goals, the startup of my business, my fears and concerns, and investment options to create the ideal future for me.

Tim’s guidance was instrumental in the final divorce settlement process. Each time an offer was presented, I would call Tim and ask him to run it through the model and compare it to the previous offer. How would the change impact my bottom line? I’d return with a tweak here and there until the settlement resonated with me. It was a taxing experience, made less grueling by the CFO of my team. The final hours were fatiguing when options and offers were being placed on the table and removed just as quickly. 

I didn’t fully decipher Tim’s many credentials listed as part of his signature on emails. What I knew was that Tim was on my side. I recognized that Tim presented me with options and solutions he believed would be the best for my situation. We developed a relationship based on being able to talk to one another, trusting his advice, pulling me in when necessary and approving a discretionary investment I wanted to make even when he considered it imprudent.

A dozen years later, I refer to Tim as my “financial husband” and I really don’t do anything without getting his thoughts and of course, his opinion. My daughter once asked me why I couldn’t just buy a car without asking Mr. Shanahan? I’ve asked him a handful of times and his answer is consistently, “Probably not a good idea now.” So I drive around town in my 11 year old car. I know one of these times when I find a car that I love and send him a text with a picture, he’ll give me the nod. But until then, I know he’s on my side, aware of my goals, knows the bottom line every month and wants me to feel safe, secure and confident.

That’s why Tim Shanahan is my financial advisor!

It’s a sad but true fact that “until death do us part” is not the case in approximately half of all marriages.  Separation and divorce bring with them a myriad of issues and a lot of stress.  Very few people give much thought to what will happen if their marriage doesn’t work out, and often they feel lost and overwhelmed.  A relatively new kind of professional advisor can help you—a divorce coach. Due to the nature of the divorce coaching practice, the process takes on many of the elements of personal financial planning and the client is presented with detailed balance sheets, cash flow analyses, and financial scenarios. This pre-divorce work becomes a very critical foundation for the investment advice which would likely follow at the end.

 We are pleased to announce that our Trusted Advisor “bench” just got deeper with the addition of  Sheila Brennan, an investment advisor representative of Compass Capital Corporation.  She is a 1982 graduate of the Drexel University in Philadelphia with a BS in accounting and a 1999 graduate of Lesley College with a Master of Education in technology.

Since 2004, Sheila has focused on a divorce coaching practice in the Greater Boston and Philadelphia areas. Working in conjunction with other members of the Compass Capital advisory team, Sheila offers the following financial support services:

• Provide a current and future financial overview
• Create a post-divorce budget
• Interpret financial issues
• Be proactive with all financial aspects of divorce.

A divorce coach is an essential component of your team who serves as your personal advocate, another set of eyes and ears with a full understanding of your issues. With Sheila’s experience in accounting and business, she understands and explains complicated financial scenarios in simple terms. Sheila creates spreadsheets that tell stories and clarify information.

Please join us in welcoming Sheila to the Compass Capital family.  Should you or anyone you know be anywhere in the process of divorce, or contemplating it, please feel free to click here to see Sheila’s website describing her divorce centric planning process.

Reach Sheila by phone at 781-760-4212 or 610-687-1414 or email at sheila@brennandivorcecoach.com.