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Issue #29-9.25.07
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Two Must Have ‘Safety Nets’ for You and Your Family
When you’re busy managing a demanding practice, trying to remain current on best clinical procedures, and caring for a young family, finding time to plan for the future is one of those things that just never seems to get done. Understandably today’s known obligations and concerns are far more pressing than tomorrow’s possible worries. Unfortunately, however, that often means that planning for the future remains on the “things I need to get to someday” list indefinitely.
Understandably, we don’t like to dwell on our own mortality or the chance that we’ll be affected by a career ending disability, even though we know that the possibility of such an event is very real for all of us. What if the unthinkable happens and tomorrow doesn’t come. Will your family be taken care of?
Certainly, financial planning and decisions about wills can feel both uncomfortable and overwhelming. However, if your focus is on preparing for the future and thinking about what you want for your loved ones, the process can be far less intimidating as you are actively taking steps to ensure that if you become deceased or disabled those closest to you are provided for as you would want them to be.
The process can begin with you and your financial advisor assessing your current fiscal circumstances. In other words, examining where you are now in terms of money - your net worth, which is the total value of everything you own, minus the debts you have to repay, your budget, your monthly income and spending patterns. It can be very eye opening to have a snapshot of how much money flows in and out of your pocket each month. In addition to assessing where you are now, you also want to consider projections, anticipated expenses, and your investment and insurance plans.
Next, sit down and answer a few questions about what you want for your family. For starters, what kind of lifestyle do you want your loved ones to have? Will they have other sources of income, such as their own career earnings, government income, or other family inheritance? What financial obligations would they need to assume, such as mortgages, car payments, healthcare expenses, school/college tuition, etc.? If you have aging or disabled family members what special care arrangements would they need? Next consider what would be a realistic financial goal to establish to ensure that your family would be well provided for.
The questions become a starting point for developing a plan to ensure that those closest to you are protected financially in the event you are no longer able to provide for them. Once you’ve considered in practical terms what it is you want for your family you can better define you financial plan. If you know where you want to be, or in this case where you want your family to be, you and your financial planner can identify the necessary steps you’ll need to get there.
Having a financial plan is a huge stress reducer for you and your loved ones because you are prepared and planning for the future, whatever it may hold.
In addition to a financial plan, the next essential step in ensuring that your loved ones are provided for in your absence is a will. Without a will, the state in which you live has specific guidelines for how property is distributed and this may not be appropriate for your family’s needs. In addition, expenses increase for the family because a court appointed administrator must be appointed, yet the cost of preparing a will in advance is minimal and can cost as little as $50 to $100.
Update your will every time there is a major change in your life (such as the birth of a child, adoption, and divorce) or changes in the lives of those mentioned in your will. Another time to review a will is if you move to another state. Laws that govern the probate process and asset transfers differ from state to state. A minor change to a will can be accomplished through language known as a codicil. Otherwise, a new will is drafted that revokes and replaces all prior ones.
Wills and financial plans are essential in ensuring that loved ones, significant others, and charitable organizations receive anything that you’ve intended for them.
Sally McKenzie is CEO of McKenzie Management. a nationwide dental management, practice development and educational consulting firm. Working “on-site” with dentists since 1980, McKenzie Management provides knowledge, guidance and personalized systems that have propelled thousands of general and specialty practices to realize their potential. Sally can be reached directly at 1.877.777.6151.
Interested in speaking to Sally McKenzie about your management concerns? Email her at Sally@thedentistsnetwork.net