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By Greg Kimura
Frazier/Hunnicutt Financial

From The Asian Reporter, V18, #4 (January 22, 2008), page 7.

By Greg Kimura
Frazier/Hunnicutt Financial

I remember playing the game "Life" when I was growing up. In retrospect, it was easy going with the flow that random spins of the wheel and turns of the cards presented. The board game has it right in regard to the fluidity of life events, and there is a valuable lesson in learning to adapt to either a good turn or misfortune. However, in the real game of life there is the opportunity to plan ahead to deal with change by having a strategy in place. Because when investing money, people can’t just wait for the next game to have another go at security and fortune. This article is a start in the development a plan for addressing change with regard to financial situations.

The last thing on people’s minds when entering a marriage may be money. However, it’s practical to consider what changes may occur. Before entering into marriage, it’s important to openly discuss how assets and finances will be managed. If a couple has different financial planners, they might consider choosing one to make things easier.

If it is a second marriage, property division and the needs of children from a previous marriage might need to be addressed. Review insurance beneficiaries and employee benefit plans, and update existing wills and trusts. This may require consultation with both financial planners and an attorney. Additionally, in the case of divorce, many of the same precautions will prove beneficial in assisting with the transition. Seek qualified help to make these situations easier.

When a child comes into the picture, be it through birth or adoption, there are several small but important areas of finances to address. Update life and health insurances, modify wills and trusts, and consider talking with a financial planner about establishing an education fund to help manage future costs. Additionally, consider evaluating childcare options, including an inquiry into possible tax-deductible options.

Many families avoid discussions about long-term care or death because we never like to consider the mortality of ourselves or our loved ones. However, it is important to have a plan in place to avoid making decisions at a time when we are least prepared to handle them.

If a spouse or other dependent requires long-term or institutional care, consider seeking advice about protecting current assets while retaining qualification for government aid. Additionally, Medicare and Medicaid rules may vary from state to state, so be sure to know how they work.

In the event of a death, it is important to have a qualified estate executor, understand the rights of a surviving spouse in regard to social security and retirement programs, recognize additional tax filing requirements, and readjust estate or investment plans to reflect the new situation. Also, discuss the merits of wills versus living trusts with a financial planner. Having the right plan in place can help avoid estate loss through probate.

It would be nice if we could always start a new game, but we can’t. And, in truth, that is the real fun of life. However, we can be ready for the changes life will throw at us by taking some time in the present to have a plan for when these events come up.