All Things Financial Planning Blog


The ‘Last’ Estate Plan

Make Money a Servant to Your LifeNow that you have diligently and thoroughly thought out your estate plans and have visited your attorney to legally document those estate plans …

Have you thought about the details of your final ‘good-bye’?

In many cases personal items that you wish to have passed to particular people or organizations will need to be specifically identified and your intentions documented to make sure that the personal item goes to whom you wish. Perhaps a video walk-through of the home with items identified and history or stories of the item told will add extra ‘preciousness’ to the otherwise valuable keepsake or heirloom. It might help explain your choices to your legatees so that they would understand your choices rather than being uncertain about them or dissatisfied by them after your passing.

For some individuals, a legacy video is obtained wherein they talk about their family history, their life experiences and maybe most importantly, lessons learned and values ingrained. Things that perhaps we just never got around to talking about or saying but that we would like to share and make certain that they are passed on to those that follow us. As a client once told me with respect to his legacy – “I’d just like them to always remember that I did pass through …”

If you were to think about your final good-bye ceremony and the involvement of family and friends to the extent desired …

  • What would the service be like and where would it be held?
  • Would it be just a service or a service and reception?
  • Who would be in attendance (and maybe who should not) and what time of day would it be?
  • Would a clergy or other specifically identified individual(s) preside over the service?
  • Would you be cremated or ??
  • What sort of expense would you think was appropriate for the service, for your casket, for your urn, for ??
  • Would there be any particular organizations that would be involved in the services like the military?
  • If donations were to be made, where would you like them made to?
  • Would there be any specific readings, scriptures, hymns or music to be used in the service? If so, would there be any particular order or place in the service that you would like them used?
  • If a casket is chosen, would you want an open casket service?
  • Would your grave site be on a hill, under a tree or in a mausoleum?
  • What would your tombstone say?
  • Who would be your pallbearers?
  • Would there be a special suit or dress that you would like to be buried in?
  • If an obituary were to be written, who would write it?
  • Any special wishes that haven’t been thought of that you have in mind?
  • Where would your family find your ‘important’ documents and will you have made them aware of that information in advance of your passing?

I don’t know where, or if, any of these considerations will come to play in your life’s passing event, but, hopefully I have given you some food for thought on this often overlooked matter of our final affairs. Having expressed our desires to those who would be making these kinds of decisions can be extremely helpful for them as they try to honor you ‘completely and respectfully’ as they would like for your celebration of life to be deservedly done for you.

May your life be abundant and fulfilled. When the time comes I hope your passing is peaceful and that you have support around you. Let that ‘last estate plan’ celebrate your memory and legacy as you would have it memorialized.

David Bergmann, CFP®, EA, CLU, ChFC
Managing Principal
The David Bergmann Group
Marina Del Ray, CA


Connecting Your Money with Your Life

So how’s that money connection going in your life? As financial planners we spend a lot of time putting things together like budgets, net worth statements, investment policy statements, performance reports, financial plans, investment strategies, asset allocations, tax analysis, insurance reviews and just about any list you can imagine. In gathering all this information, sometimes we forget to ask the most important question: Why? It’s important to know what your motivation is, what you are trying to do, and why you are doing it. The motto of my organization is “Connecting your money with your life.” When I say that to people, they get a puzzled look on their face and those that are more candid ask what it means? My first response to the question is to answer with a question: what are you trying to accomplish in your life? That’s where it gets interesting because people go in one of two directions. First they will talk about the “stuff” like having a vacation home on the water, owning a nicer car (maybe even a midlife crisis car), paying for the kids $50,000 a year education, taking a trip around the world, being able to retire on $100,000 a year and able to have a little left over as legacy for the next generation. All of these things are important, but is that what makes you happy and fulfilled when it comes to your life? If the answer is yes then you can stop reading right here because that does it for you. If your answer is no, then let’s go on to the next paragraph.

To me, connecting your money with your life is about achieving the things that you wanted when you were 10 years old. You want to have good friends that you can trust, to have fun, be happy, be your own person, and have a life of meaning, even if you didn’t get drafted by the Celtics or Red Sox. That means it’s all about what you want to give, or even give back. I hope number one on your priority list is your family. After that it may be your career, social life, religious beliefs, hobbies or giving back to the community. You begin to learn in the financial planning process that it’s not what you accumulate that becomes the most important connection, it’s about giving back and making the world a better place that completes the money-life connection.

The two most important things in my life are my family and my profession. Why else would I be sitting here at six o’clock on a Saturday morning writing an article for people that I don’t even know? It’s because I’m trying to make your life a little better by allowing you to see things that even I, a well trained financial planning professional sometimes forget. The main goal is to connect your money with your life. It isn’t about net worth, it’s about self worth. Whether it’s money we give, wisdom, compassion or even just our time, the Bible had it right when it said that “it’s better to give than to receive.” Not that I’m complaining about receiving since it is my job to help people try to achieve a comfortable life with financial freedom.

So my exercise for you is to think about everything during the next few days that puts a smile on your face. Try to avoid the things that drain your energy and do more things that give you energy. My mantra has always been the five S’s where I try and make everyone Smile, be more Self-Aware, be more Self-Assured, be Smarter and be more Successful. If I’ve done that in a conversation then I’ve accomplished my money-life connection. Find out what you love to do and develop your own S list! Try to keep a log of what made you a little warm and fuzzy that day. Pull out your financial plan that lists your budget, net worth statement, insurance, investments, performance and your “to do” list and start writing out your own list as to why you do what you do, and what makes you feel good. I recently read a book by Simon Sinek and it talked about some of the best people and corporations in the world and why they were successful. The book used a lot of examples like Apple, Harley Davidson, Martin Luther King and the Wright brothers. It focused on 3 questions that separate them from others. What do you do, how do you do it and WHY do you do what you do? The differentiator is WHY! So answer that question about yourself today and check out this video link by spending a few minutes listening to the WHY hypothesis. If you can do that, then you have fulfillment in life, both financially and emotionally. Another resource to take a look at if retirement is high on your priority list is The New Retirementality by Mitch Anthony. It talks about having the passion and desire to wake up and do the things you love to do for the rest of your life. It’s important to realize there are two sides of our brain. The left side does the calculating of the information. The right side of the brain makes you feel good about it. I feel that getting an 8% rate of return versus 6% is not as important as the daily satisfaction of doing what matters most to you (although we will still try hard to get higher returns!). So use both parts of your brain and you will learn to connect your money with your life. You will live a more fulfilled life as well as a financially successful one!

Dave Caruso, CFP®
Certified Financial Planner™
Coastal Capital Group
Danvers, MA

1 Comment

Things to Consider Before Loaning Money to Family Members or Friends

With banks and credit card companies tightening their lending practices, some would-be borrowers are looking for loans from another source — that long-established institution, the First Financial Family Bank.

Loaning money to friends or family members has so many pitfalls that it’s not even possible to list them all in one column. A financial adviser is almost never going to tell you it’s a good idea. Yet, it’s something many of us have done and will probably do again.

Here are a few points to consider before you write a check to help out a family member:

  1. If at all possible, don’t. Instead, use this as an opportunity to do some financial coaching on budgeting and money management. Your wisdom may be far more helpful than the money. Consider a loan as the last resort, and first spend some time exploring other ways you might be able to help. Could someone who has lost a job move in with you or another family member? Could you help with child care or transportation? Perhaps a referral to a credit counseling agency would make sense.
  2. Make sure you know why the family member is asking to borrow from you instead of a bank. Often, those wanting to borrow from private individuals do so because a bank won’t loan them the money. If the prospective borrower is a poor credit risk, take a hint from the financial professionals and don’t risk your money, either.
  3. Make sure the loan is in writing. At a minimum, draw up a promissory note using standard forms (available online and through office supply stores). Especially for larger loans, it’s wise to have an attorney draft a document. Make sure you have a set repayment schedule and interest rate.
  4. Use a third party escrow service to keep track of the payments and the balance due. This avoids calculation errors and disagreements over how much is still owed.
  5. If possible, secure your loan against the borrower’s property such as real estate or a vehicle.
  6. If it’s your children wanting to borrow, ask yourself if rather than “helping” them you are enabling poor financial behavior. If a loan would continue a pattern of unwise money choices, it may be time to start saying no.
  7. Especially in situations beyond someone’s control, like a job layoff or a car accident, consider whether it would be more helpful to make a gift rather than a loan if you can afford to. One possibility for parents could be to offset a financial gift by leaving the recipient a smaller inheritance.
  8. If you do loan money to a family member, mentally consider it a gift. Only lend an amount you will feel absolutely fine about never getting back.
  9. Never borrow money to loan to a family member. If you don’t have the money to help someone out, putting yourself in a financial bind along with the other person is only likely to make a bad situation worse.
  10. Focus on the relationship, not the money. As you consider options for helping a family member who is in financial need, ask yourself which of those options are most likely to strengthen the relationship rather than damage it.

It’s not easy to say no to friends or family members who want to borrow money. Yet the emotional baggage that often accompanies such a loan can put a serious strain on even close relationships. Think carefully before you write a check. Sometimes the best loan arrangement between family members is the one that is never made in the first place.

rickKahlerRick Kahler, CFP®, MS
Kahler Financial Group
Rapid City, SD