Joan Rivers, Robin Williams, Philip Seymour Hoffman and Mike Nichols. They’re all industry legends. We’ve been entertained by them for many years and miss their unique talents, wit and spirit.
They were incredibly talented, creative—and most would assume financially successful. However while bringing home or being nominated for that elusive Oscar—some may not have won an award for their financial planning.
The old adage about death and taxes rings true—and no matter what your profession or income, life can be complicated. Whether you’ve had a long-enduring relationship, kids, several spouses, just as many houses and businesses (and did we say grandkids), without a solid estate plan in place, all your hard work can be for naught without some financial forecasting.
Time is On Your Side
The earlier you plan and the earlier you save, the better you are able to face financial downturns. Joan Rivers and Mike Nichols had time on their sides to build their incomes over long careers, as well as solid financial plans in place. They created strategically designed business and estate plans (not to mention having adult children) which made the transfer of assets at their deaths that much easier. Philip Seymour Hoffman and Robin Williams had different family situations that may have made their estates a bit more complicated.
Of course, no one wants to think about what happens “when I die.” However, planning for the expected—as well as the unexpected—will help give you a greater peace of mind.
Ways to Take Action Now
So what can you do now to help secure your financial future? Here are five suggestions to shape your strategy.
- Leave a legacy that reflects your values and priorities. This is usually created in the form of a trust, and is an opportunity to tell your story. There are a number of ways to have your wishes heard and directed through financial planning. Also, homes and businesses owned within a trust may be protected from certain liabilities and can be afforded tax advantages.
- Consider the differing needs and situations of your loved ones. Every family is different. You may wish to pass on your business to your children, set up educational funds or care for a special needs relative.
- Streamline your estate management. Estate taxes, plus federal and state taxes can eat up your assets quickly if you don’t plan ahead. In 2015, personal estate tax exemptions are $5.43 million per individual. With professional financial planning, you can avoid the hassle of probate and the time it would take for your heirs to resolve your estate.
- Maximize your charitable giving. Many people wish to leave a legacy for their families as well as to community organizations. From donor-advised funds to charitable planning, you can maximize the impact of your donations.
- Make plans for the unexpected. An important part of financial planning is to specify your end-of-life preferences. While some people may find this a bit morbid, it’s good to know that you can have control over your estate, your medical treatments, who can help make decisions and other vital issues before you need them. A living will combined with an advanced health care directive can take care of most of these basics.
Enjoy the Academy Awards—and give yourself an award for whatever you do best. Everyone’s situation changes throughout the years—marriage, divorce, death, birth, new job—and that’s just the first level of what to consider. Now is the time for a quick financial planning checkup to learn more about how to make your plans for the future a reality and create the legacy you wish to leave.