Don’t Try This at Home: How to Build a Stable of Experts to Help with Financial Matters
By Jessica Lanning, JD, CFP®
July 5, 2022
There’s a line from the 1964 film Zorba the Greek, where Zorba (played by Anthony Quinn) upon asked if he is married, replies, “Am I not a man? And is not a man stupid? I am a man, so I’m married. Wife, children, house – everything. The full catastrophe.” It’s intended as a joke…. Laugh.
If you’re engaged in your own “full catastrophe,” it’s now time to tackle the grown-up checklist that comes with it: financial planning, taxes, estate planning, buying insurance, perhaps running a business.
Sure, you can do it all yourself, most likely to your own peril. Or, hire help.
Who To Hire and When
The following is a list of experts who can assist you with making sure your bases are covered, your affairs are in order, and confirm along the way that things are running smoothly. In most cases, the adage that you get what you pay for is true. Don’t overpay, and certainly hire wisely.
Hazard insurance agent
What this person does: They help you find homeowners’, renters’ or auto insurance. They also insure boats and RVs. They can also help you determine how much of an umbrella policy you need.
When to hire: You probably already have an agent if you’re a licensed driver with a car. Then, add on more policies as life changes and you need them — when you’re buying a home, after your first child is born (or when you become a pet parent/custodian), when you buy that boat or RV, or when you start using your car for business purposes.
Why you want a professional: Advertising suggests that you should choose your insurance agent based on the premiums (price) of the policy. Wrong. What’s more important is hiring an agent/company who is going to be there during the claims process should you have a loss.
Those people are truly worth the price differential. They will lower your anxiety and hold your hand along the way.
Also, if you have most/all your policies with one agent/company, you will get a multi-policy discount, and even more importantly, that agent can identify any gaps in coverage. The last thing you need is to think you’re adequately covered and not be.
What this person does: This person helps you with your taxes, including preparing and filing your tax return. This person should also do tax planning with you to minimize taxes both now and in the future.
When to hire: You can probably do your own taxes if you are simple — that is, you have a salaried job with a bonus, own a home, and have a spouse and kids. Once you get more complex — have stock options, investment property, own a business, etc. — you need to hire help. You will work with this person at least twice a year and probably more often.
Why you want a professional: Being successful financially is about making and saving money but it’s also about not losing money. Taxes are typically the biggest line item in a household spending plan (budget). Preparing taxes is as much of an art as it is a science. Lowering your tax bill means having more money to save or spend on other things. Staying within the good graces of the IRS is a good practice. Having an advocate should the IRS come calling is critical.
Life insurance agent
What this person does: This person helps you choose a life insurance policy and/or annuities that meet your needs
When to hire: When you have people depending on you financially, such as a spouse or child. You may also want to consider buying life insurance if you have significant debt, such as a mortgage or student loans.
Why to hire a professional: When you’re getting started in life, a simple term policy may be all that you need and can afford. You need someone who can determine how much that should be and explain to you other options as your income increases and your life gets more complex.
Permanent life insurance allows you to build an asset that you can use for a variety of reasons in a cost-effective and tax-efficient way that can be of a huge benefit to your family. It’s going to look pricey. Someone is going to tell you to “buy term and invest the rest.” Careful. Do not overlook its opportunities.
Estate planning attorney
What this person does: This person helps you plan for the distribution of your assets should you become incapacitated and after you die. This might include creating a will, living trust, health care directive or powers of attorney. There’s no worse intersection on this planet than death, family, and money. Having the proper documents in place will save your heirs time, money, and anguish. It’s a great act of love to your family to get this done.
When to hire: After you’ve accumulated assets (a house, savings, retirement accounts, investments), gotten married, or if you have minor children. You should also consult with an estate planning attorney if you’re in a second marriage and have children from a previous marriage.
Why you want a professional: Sure, you can do this online or use your company’s legal support benefit. Nothing, however, will replace personalized attention and making sure these documents reflect the most recent laws, conform to your wishes, and actually get completed.
What this person does: This person helps you with the legal aspects of running a business, such as incorporation, contracts, and leases, preparing a business for sale, and keeping employment and legal issues to a minimum. These people typically work with lots of other business, and the “cross-pollination” of advice from one to the others is invaluable. They can keep you out of trouble and in a creative, profitable trajectory.
When to hire: When you’re starting a business. If this person cannot scale with you as you grow, you’ll need to hire another one who can handle more complex issues as the business gets bigger.
Why you want a professional: Again, you can do business formations yourself, but you will learn little from the process that will need to be repeated, the cost to set up a business is not that high, and you want to build the ally. Business owners tend to see their attorney as a partner in their success. Don’t deny yourself that support.
What this person does: This person helps you plan for your financial future, which might include saving for retirement, investing, buying insurance or paying down debt.
When to hire: When you have specific financial goals you want to achieve, such as saving for retirement or college, or when your finances get so complex that you need the additional set of eyes and brain cells.
You might also want to consult with a financial planner if you receive a windfall (inheritance, bonus, etc.), or experience a major life change.
Why you want a professional: Unless you want to spend your free time becoming a financial planner so you can do everything yourself, get someone in your corner to help. A financial planner can also be your “general contractor” to hire all these other experts as “sub-contractors.” Financial planners are excellent at identifying who you need to hire and when. As your assets grow, that person can be making mid-flight corrections with you and increase the chances of your financial success.
Social Security and Medicare specialist
What this person does: This person helps you understand how Social Security and Medicare work, and how to make the most of these government programs.
When to hire: If you become disabled, when you’re 60 years old and probably again at 64 years old. and want to know how to maximize your benefits under both programs that makes sense for your particular situation.
Why you want a professional: The rules for Social Security and Medicare are Byzantine, ever-changing, and there are lots of ways to “game” the system. You want someone who knows how to do that so you don’t have to and can get the most out of these programs. This is particularly true if you are married.
Elder care/long-term care specialist
What this person does: This person helps you plan for the care of your or an elderly family member, which might include in-home care, assisted living or a nursing home.
When to hire: When you have an elderly family member who needs assistance with activities of daily living, such as bathing, dressing, eating or using the bathroom. You should seek a consultation about long-term care options when you become seriously ill or when you turn 60, whichever comes first.
Why you want a professional: Making long-term care decisions is difficult and rife with pitfalls that you cannot see because you don’t do this every day. You want to make the most conscious decisions you can about your care when you have the cognitive and financial ability to do so. When those abilities go away, someone starts making those decisions for you.
Surround Yourself With Good People
When hiring any of these professionals, do your research and your due diligence. Ask friends and family for referrals. Ask good questions. Do not be afraid to have multiple meetings before you engage in a contract. This is your life and your money. These people should be helping you make good, conscious decisions about both. If not, move on.
As Zorba reminds us, being an adult comes with a lot of responsibility. But it doesn’t have to be all doom and gloom. By assembling a team of experts to help you with the various financial aspects of your life, you can take some of the stress out of being an adult. And, who knows, maybe even laugh along the way.
If you need a referral to any of the above professionals, please reach out.
Lanning Financial Inc. is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.