Unfortunately, It's a Fact: You're Going to Die One Day
By Peter T. Waldron
Managing Partner of Waldron Partners
“What we have done for ourselves alone dies with us; what we have done for others and the world remains and is immortal.” - Albert Pike
Sorry for such an ominous title, but I really wanted to catch your attention and convey the fact that one day you will indeed die. This is something that I think about, obviously not for pleasure but because of my profession. As part of my job, I must consider my client’s eventual demise. This is something that I had to come to terms with early on in my career as it became apparent to me that this topic would be regularly discussed. While we can’t control our ultimate departure, we should understand the impact it will have on our family’s financial situation. For this article, I will break down this topic into three broad phases: early family life, financial independence, and advanced years.
The early family life phase can be the hardest time to contemplate your own mortality but is arguably the most important time. To frame this, you are just recently married, planning to start a family, and now you must consider the fact that you might die … obviously, not the best timing. That said, it is important to consider the financial future of the family you are planning as they will continue even in the event you are no longer here. This planning must take into consideration your current resources and what objectives you want covered in your absence. While this is different for everyone, some plans might include covering your lifetime earning potential, education costs, and other future planning objectives (e.g., homes, cars, etc.). While the planning around your death this early on is difficult, the cost to solve the potential deficit that will be created by your absence is at this time very inexpensive.
The next phase is the one that most people strive for: financial independence, or in other words, the ability not to work if you so choose. At this point in their financial journey, many people will still ignore the likelihood of their own demise. The thought of it clouds the jubilation of financial freedom, and while there are not a lot of planning elements to consider, nonetheless they must be. What financial impact would your death have on your surviving spouse and family? And while in most situations financial independence includes your spouse and family (and so your death would not change their situation), there is the possibility that there would be considerable taxation (estate taxes) that could impact their financial independence at the time of your passing. Additionally, they would be affected if your passing resulted in the end of an income stream (e.g., pension/trust distribution) or if assets were transferred away from them because of estate planning vehicles (e.g., generational trusts, irrevocable trusts, charitable trusts).
The last phase, the advanced years of your life, can be defined loosely as the latter part of your retirement. You are now winding down and have likely seen your children and grandchildren mature into adults who are starting their own families. This is when many people begin to truly feel the end and start to formulate their legacy with the funds that they have remaining. While I do not consider this the best time to begin formulating one's legacy, for many it is the first time they feel it is appropriate. At this time, there are several elements that are paramount to consider fully in terms of your ultimate beneficiaries. Sometimes leaving money to family can result in negative outcomes; in some instances, your death might even lead to the death of family cohesion. It is important to understand these dynamics when planning.
Each of the phases discussed above come with an array of planning considerations and dynamics. It is important to take the time to fully understand your objectives, current planning, and the hidden opportunities and gaps. While it is difficult to understand every aspect of your financial life, after your death is probably the worst time to start planning. The implications of your death are significant, and you should not take them lightly. While this article focuses on the financial impacts of your death, we believe these are the easiest to solve as the loss of any life is truly a tragedy.
“I am ready for anything that happens. Death is never polite, even when we expected it. The only thing I pray for is the strength to go out without complaining.” – Herbert Butros Khaury
PLEASE CONTACT PETER WALDRON TO SCHEDULE A COMPLIMENTARY REVIEW OF YOUR FINANCIAL SITUATION: 925-786-7686 or firstname.lastname@example.org – You can also complete a complimentary business owner survey – https://www.berireport.com/Survey/Register/A90A1389_8330 – The results of the survey will help you define your optimal exit plan.
Peter T. Waldron: California Insurance License #0E47827
Peter T. Waldron is a registered representative of Lincoln Financial Advisors, a broker/dealer, member SIPC, and offers investment advisory services through Sagemark Consulting, a division of Lincoln Financial Advisors Corp., a registered investment advisor, Waldron Partners, 3201 Danville Blvd., Suite 190 PO Box 528, Alamo, CA 94507. Waldron Partners is not an affiliate of Lincoln Financial Advisors. Insurance is offered through Lincoln Marketing and Insurance Agency, LLC and Lincoln Associates Insurance Agency, Inc. and other fine companies. This information should not be construed as legal or tax advice. You may want to consult a tax advisor regarding this information as it relates to your personal circumstances. The content of this material was provided to you by Lincoln Financial Advisors Corp. for its representatives and their clients. CRN-34555855-021721